EU courts Asia, banks on China

October 27, 2008 By

Global Geopolitics Net Sites
Monday, October 27, 2008

© Copyright 2008 Susenjit Guha. All rights reserved.

By Susenjit Guha

European Commission President Jose Barroso, who is also a former prime minister of Portugal, urged China, India and Japan to “be on board” at the Asia-Europe Meeting in Beijing over the weekend. “It’s very simple: we sink together or we swim together,” he said. Apparently exasperated at Europe’s traditional ties with the United States, he seemed eager for a new alliance. The need for a paradigm shift has come, to tackle the worst financial crisis to hit the globe in 70 years.

At the meeting of 40 leaders in Beijing, climate change and food security concerns were overshadowed by news of a continuing bloodbath of global stocks. Barosso urged countries to resist calls for economic nationalism and protectionism that would only hurt prospects for a recovery, and underlined the need to regulate the world’s markets.

German Chancellor Angela Merkel wanted more transparent markets, stricter supervision and closer international cooperation. French President Nicolas Sarkozy wanted more radical change, seeking to rewrite the rulebook for international capitalism at next month’s meeting of world leaders in Washington. He asked for assistance from Asian governments.

The International Monetary Fund failed to provide advance warning of the impending implosion in the financial markets, and has been slow at responding to requests from affected nations.

Laissez-faire has proved to be grossly unfair, as the Wall Street meltdown is not only melting the tar on Main Street, freeways and country roads in the United States, but has clogged narrow streets and roundabouts in teeming Asia as well.

And why is the European Union worried? European capitals are in the grip of Obamania, hoping for a real change in the United States – and the way it is perceived around the world – with the presumed election of Democratic presidential candidate Barack Obama next month. But Obamania does not guarantee European support for more troops for NATO engagements in Afghanistan and Iraq. Displeasure in Europe over U.S. unilateralism has been ratcheted up by the conduct of reckless financial institutions.

Positioned between the United States and the neighboring landmass of Asia, Europe needs to build bridges with the continent of the 21st century, Asia. As Barosso stressed at the ASEM meeting in Beijing, “We represent three-fifths of the world’s population and produce half of global GDP. Our combined action can and should make a real difference.”

Who other than China – even though Japan and India, the new kid on the block, were present – should take the lead in finding a solution to this crisis? With nearly US$2 trillion in currency reserves – more than Canada’s GDP – China is best positioned to step in. As Kim Eun Mee, professor of international studies at Ewha Women’s University in Seoul, South Korea, stressed, “Other ASEM nations have been calling for China to take a more leading role … to mediate a consensus among ASEM nations.”

Ahead of the Washington talks on Nov.15, China is being asked to ease its restrictions on banking, to prop up the strong yuan and to build a US$350 billion reserve firewall to protect the region’s currencies. Thailand wants this, and Citigroup Vice-President William Rhodes reiterated in the Financial Times that China was indispensable in solving this crisis.

But China’s leaders are wary of assuming so much responsibility at this stage of their country’s development, stressing that their first priority is raising the living standards of their own people.

Before the ASEM began, China, Japan and South Korea, along with 10 Southeast Asian nations, pledged a US$80 billion chest to stave off currency speculators, but no date was set for the launch of this fund.

The toxic sub-prime loan disaster has not hit China directly, but for the first time in five years growth has fallen to 9 percent as inflation creeps up. Exports, pivotal to China’s economic surge, will be affected as the U.S. and European economies continue to reel.

World leaders did their best to soften China up and bring Asia on board in an effort to introduce financial reforms at the Washington summit that would tackle the root causes of the crisis.

But judging by a commentary in the official newspaper, the People’s Daily, by Shi Jianxun, a professor at Shanghai’s Tongji University, not everyone in China was impressed. Shi stopped

short of explaining how a non-convertible yuan could help, but said the euro, British pound, Japanese yen and Chinese yuan should be the currencies used for trade between the European Union and Asia. He demanded a boycott of the U.S. dollar, lambasting the United States for protecting its own interests while other countries’ wealth drained away.

Awarding the Sakharov Prize for the defense of human rights to jailed Chinese dissident Hu Jia one day before the Beijing summit was meant to remind the Asian dragon that Europe will continue to play the rights card, even if it has to court the dragon’s wealth.

Asia does not have even an EU-style semblance of solidarity, which may mean the various Asian governments will adopt different views on tackling the crisis, rather than uniting behind a European initiative. Of course, China will have its own way of doing business, taking the best and the worst of all worlds.

Time will tell if the overtures of a humane capitalistic Europe will be able to smother China, which cannot escape this financial crisis in the long run.

About the Author:

Susenjit Guha is a writer and journalist based in Kolkata, India. He contributes a weekly commentary and analysis for UPI Asia and has written on Indian and global political issues for such online publications as Online Opinion (Australia) and Foreign Policy in Focus (USA) and M.J Akbar (India).

Image Source:
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Author: Dmitry Fironov

Filed Under: Asia, Debt Crisis, Economy, Exclusive

LOWS IN INDIA-SRI LANKA RELATIONS – OPPORTUNITY FOR TURN AROUND

October 26, 2008 By

Global Geopolitics Net Sites
Sunday, October 26, 2008

© Copyright 2008 Malladi Rama Rao. All rights reserved.

By Malladi Rama Rao

Many commentators see in the present lows in the India-Sri Lanka relations a repeat of history – what had happened twenty one year ago, June 1987 to be precise, when President J R Jayewardene was in the midst of ‘Operation Liberation’ for Vadamarachchi. Delhi had airlifted a plane load of journalists to Rameswaram and sent them along with a ‘relief flotilla’ to Jaffna. Some of us, who were engrossed in catching up with the history of Rameswaram, missed the flotilla. The Indian diplomat, who was of the rank of a director in the foreign office, was amongst the ‘left out’. We caught up with the ‘journalists’ ship’ by hopping on to a barge.

Sri Lankan navy stopped the flotilla short of the maritime boundary. The Navy commander was very polite but did not mince words. “You cross the line. We will fire at you”, he told the Indian official, who, we felt, was not willing to take any risk what with so many journalists listening to them on the ‘open radio’. By the time the flotilla returned to the shores, it was past mid-night and we all missed our deadlines. Compensation of sorts came the next day afternoon by way of aerial food drop mission.

This incident comes back to mind because once again ‘humanitarian ‘ issues have become talking point in the India-Sri Lanka relations. And questions are being asked particularly in the Sri Lankan circles whether what had happened at the door step of Vadamarachchi will repeat at the gate way to Kilinochchi. India has not directly or indirectly asked Colombo to stop the Eelam War. Foreign Minister Rohitha Bogollagman has frankly conceded this point as recently as October 21 on the floor of Sri Lanka Parliament.

Vikitha Herath (JVP) asked him ‘what are the pressures created by India government on the Sri Lankan Government to stop the military operation against terrorism. Foreign Minister replied in the negative. Herath persisted (according to the transcript of the proceedings) by asking ‘What is the action taken by the Sri Lankan Government regarding such pressures’. Replied Bogollagama: “Doesn’t arise’. And categorically emphasized that the Government of Sri Lanka has not faced any kind of external pressure from any quarter regarding the operations by the security forces to defeat terrorism and disarm the LTTE.

President Mahinda Rajapaksa picked up the refrain the same day and it should have been sweet music to Prime Minister Manmohan Singh. Because the media and political verdict in Colombo is very harsh against him. Interacting with media heads and editors at Temple Trees, Rajapaksa said there was no demand from the Indian government to halt the military campaign when he spoke to Singh on telephone. A statement circulated later by President’s office said: “It is the primary responsibility of his government to look after all the citizens. He carries out this responsibility to the fullest especially with regard to the people who are temporarily displaced in the north, due to the ongoing military operations to defeat terrorism.’ The statement went on to quote President Rajapaksa to say, ‘There is a wrong impression created in Tamil Nadu that this not been done. This is furthest from the correct position. All these are our citizens and we take every measure to look after and provide for them.’

MISPLACED EUPHORIA

As some Colombo dailies noted, the tone was ‘conciliatory’. It was quite a contrast to the report aired on Sri Lankan Broadcasting Corporation’s main news bulletin on Oct 14. It reflected what has come to be identified as Sinhala-Buddhist euphoria and gave currency to the view that whatever be Tamilnadu compulsions and vote politics, Prime Minister Singh is a chicken in an elephant body and hence would like to do a Rajiv Gandhi. The all-party meeting convened by the President sent out the same message and declared its opposition to any Indian intervention.

Interestingly, at no point of the escalating Wanni war, India had called for an end to the military campaign. Its advice: try for a political solution which will be long lasting. And any solution should be within the frame work of unity and integrity of the island nation. This is what the Indian Prime Minister reiterated when Rajapaksa managed to speak to him last week end (after failing to meet him in New York on the sidelines of UNGA session).

External Affairs Minister Pranab Mukherjee elaborated the theme when he made a statement in Indian Parliament on Wednesday Oct 23. So much so, where is the question of India in general and Tamilnadu chief minister in particular orchestrating a campaign to bail out LTTE. In fact, any observer will agree that there is no change in the stand of Delhi and it is not music to Prabhakaran. That is why the high decibel propaganda emanating from Colombo that India is surrendering to the killers of her great son Rajiv is amusing to say the least.

Whatever be one’s political inclinations, it cannot be held against Karunanidhi that he is supporting the LTTE at the present juncture. The humanitarian concerns were first voiced by CPI, which is not known to be Tamil Chauvinist. Others including DMK chief picked up the issue. In all his recent public remarks, Karunanidhi only spoke about Tamils and Tamil race in the context of SL developments. “I am unable to sleep whenever I think of it. Let us avoid the racial genocide in Sri Lanka …”, he wrote in Murasoli, the DMK mouth piece.

One may turn around and ask what about his ‘ultimatum’ to Delhi and threat to withdraw his MPs if Delhi doesn’t act by Oct 28. It should be remembered that Indian Parliament has entered its slog overs with the talk of general election in early February. To that extent, Karunanidhi’s threat doesn’t hurt Manmohan Singh and influence his government’s policies.

Any how, there is continuity in India’s foreign policy whoever is in power in Delhi. It may be recalled Jayalalithaa Jayaram of AIADMK as the TN chief minister led a delegation to then Prime Minister Vajpayee on Sri Lanka issue. And the BJP led government articulated India’s concerns just the way the Congress led government is doing now. In other words, unlike in other democracies, India’s foreign policy is based on national consensus and is not dictated by coalition blues

DELHI-CHENNAI WAVELENGTH

Will Karunanidhi execute his threat spurred by his own local concerns in Tamilnadu? One intelligent guess is that he will not. His close aide T R Baalu, who is also a minister in Manmohan Singh government, has already said that they (DMK) have no intention to bring down the government. “We are not doing anything to help or save the LTTE. We only want to help the orphaned Tamils”, he said in Chennai.

Put differently, there is not much of a difference between Chennai and Delhi on issues related to Sri Lanka. There is a clear distinction between LTTE and ethnic Tamils wherever they may be living in the island nation.

India has umpteen options to make Sri Lanka realise that it is but an island by itself in today’s global village. Yet it chose to be the true friend in need, and not an adversity in distress. It also ignored Colombo’s half baked attempts to bring in other players into the SL theatre. That is not because of any magnanimity but because India knows its backyard and knows, if it comes to crunch, how to protect its interests and influence without much ado.

Obviously, most mainstream politicians and commentators in Sri Lanka have horribly failed to read the TN pulse and the Indian mood. They allowed themselves to be straight jacketed as before and started indulging in cheap talk like why not Colombo also fund fringe terror movements across India. And got carried away by pseudo-nationalism.

Like Sarath Fonseka, for instance. Since he is an army commander, the government, if not the defence minister, should have ‘checked’ his excessive exuberance. That did not happen.

A quiet requiem has been said for APRC and to the much talked about devolution package. There are enough signals that the ruling party will like to ride over the crest of Wanni war euphoria and secure a 2/3 majority in Parliament. Politicians have a tendency not to look beyond the immediate. They also tend to be economical in what they say and do as is the case now when a major humanitarian problem is rocking the north of their own country.

It defies logic why Colombo needed to be reminded of the heavy costs in terms of human suffering in the course of latest military campaign. The 2, 70, 000 Tamils caught in the conflict zone are Sri Lankans first and foremost.

Till Chennai first and then Delhi spoke up for these hapless people, Colombo refused to acknowledge their plight. Otherwise, it would not have ordered the exit of international relief workers (except the Red Cross).

It should have corrected its act when Sri Lanka was voted out of the Human Rights body of the United Nations. And worked to win over the Northern Tamils and removed their mistrust of the government agencies, the armed forces in particular. An element of empathy with them is essential as they are caught between the might of the state and the gun power of a non-state player. Turning ire on NGOs accusing them of indulging in anti-Sinhala propaganda doesn’t help.

TIME TO ACT

The situation in Sri Lanka is the subject of a recent debate in the British Parliament. The Minister for International Development, Michael Foster termed the situation as grave. As the intensity of fighting has risen, the space in which humanitarian agencies could operate has been constricted, he said, virtually echoing the sentiments of Delhi. Both he and members who took part in the debate were concerned over restrictions on the press in Sri Lanka as well as ‘harassment, physical attacks and even assassination’ of innocent persons.

Suffice to say, humanitarian concerns are something no civilised society can afford to ignore. It is not an issue that should be used to score political points either at home or across the Palk Strait in India. Instead of anti- Indian sentiment, what is needed is Colombo, Chennai and Delhi working together to help an estimated 150,000-200,000 people in the uncleared areas. Relief to them should not be tied to end of Wanni war. Firstly because, the LTTE is reportedly preventing them from coming down south. Secondly because, an end to the war is still not in sight (at the time of writing this article).

A senior SL politician (who is still around and active in the power circuit), once told me India is like an old lady whom Colombo should keep telling that she is looking beautiful. We both laughed at the analogy. That was three years back. I don’t know whether the government in Colombo subscribes to this view. What is however essential is that neither India nor Sri Lanka should make an enemy of each other.

About the Author

Malladi Rama Rao is an analyst and writer on the Indian political scene and geo-political and security issues of South Asia. He directs a Weekly Feature Service in English, Syndicate Features, in colloboration with his wife Vaniram. He is also the India Editor of Asian Tribune.

SYNDICATE FEATURES

B-308, Puneet Apts. B-10, Vasundhara Enclave, Delhi; Ph -22617660 E-mail: syndicatefeatures@rediffmail.com

Filed Under: Exclusive, Geopolitics, Peace Efforts, Politics, Tensions

China Threatens neighbors in South China Sea

October 24, 2008 By

Global Geopolitics Net Sites
Friday, October 24, 2008

© Copyright 2008 James Crickton. All rights reserved.

By James Crickton*

London: With the Olympics behind now, China has begun flexing its muscles to brow beat its neighbors to fall in line or face the music. Serious concerns have been expressed, especially by Vietnam, over the recent intense activities of the Chinese Navy in and around the disputed Paracel and Spratly islands in the South China Sea.

Chinese naval vessels have adopted threatening postures to mount pressure against Vietnamese oil exploration activities in and around the disputed islands for alleged violation of Chinese territorial waters. The Vietnamese Government, however, held that oil exploration was undertaken within their continental shelf and the EEZ. Exxon Mobil, which entered into a joint exploration agreement with PetroVietnam, had been forced to terminate their activity around Spratly islands following Chinese threats.

A Norwegian ship, hired by Vietnam, for oil exploration was intercepted by the Chinese naval ships and threatened to fire unless it leaves the disputed area in the South China sea region.
[Read more...]

Filed Under: Exclusive, Geopolitics, Politics

CHINESE ECONOMY MONITOR—NOTE 2

October 24, 2008 By

Global Geopolitics Net Sites – Global Politics Online
Friday, October 24, 2008

Copyright © B. Raman – Chennai Center for China Studies
www.c3sindia.org

B.RAMAN

( What will be the impact of the global financial and economic melt-down on the Chinese economy? This question should be of interest to the
other countries of the South and the South-East Asian region. If the Chinese economy is badly affected, they too are likely to feel the
negative consequences of the down-turn in the Chinese economy. Keeping this in view, we have been brInging out a periodic “Chinese Economy Monitor” based on open information. This is the second in the series—B.Raman)

INCREASED UNCERTAINTIES, SAYS HU

At the start of the Asia-Europe Meeting (ASEM) Summit in Beijing on October 24,2008, President Hu Jintao of China said: “The fundamentals of the Chinese economy have not changed. However, the global financial crisis has noticeably increased the uncertainties and factors for instability in China’s economic development.We are now confronted with many difficulties and challenges in our economic endeavours.China must first and foremost run its own affairs well. In the light of the changing domestic and international financial situation, we will make our macroeconomic regulatory measures more proactive, focused and effective and make timely adjustments to our policies.We will vigorously expand domestic demand, especially consumer demand, maintain economic financial stability and the stability of capital markets, and continue to promote sound and fast economic and social development.”
[Read more...]

Filed Under: Economy, Exclusive, Politics

CHINESE ECONOMY MONITOR— NOTE 1

October 22, 2008 By

Global Geopolitics Net Sites – Global News Blog
Wednesday, October 22, 2008

Copyright © B. Raman – Chennai Center for China Studies
www.c3sindia.org

B.RAMAN

( What will be the impact of the global financial and economic melt-down on the Chinese economy? This question should be of interest to the other countries of the South and the South-East Asian region. If the Chinese economy is badly affected, they too are likely to feel the negative consequences of the down-turn in the Chinese economy. Keeping this in view, we intend brInging out a periodic “Chinese Economy Monitor” based on open information. Here goes the first Monitor in the series—B.Raman)

CITIC PACIFIC FACES ENQUIRY

The Securities and Futures Commission (SFC) of Hong Kong announced on October 22,2008, that it has undertaken an enquiry into the affairs of the Citic Pacific, the Hong Kong listed branch of the China International Trust and Investment Corporation, following a report submitted by the Citic Pacific to the Hong Kong Stock Exchange on October 20, allegedly admitting that two of its senior executives had entered into unauthorised foreign exchange forward contracts in Euros and Australian dollars, which have already resulted in a loss of US $ 104 million, with a possibility of further losses, which could run up to another US $ 200 million. Among those reportedly facing enquiry are a Finance Director of the Company and the daughter of the Chairman of the company, who occupied a senior position in the company. It has been reported that pending the enquiry she has already been demoted. Albert Ho, a member of the Hong Kong Legislative Assembly, has accused the company of concealing this information from the investors. The Citic Pacific has reportedly admitted that it became aware of this unauthorised transaction on September 7. According to Ho, the company did not mention this in a circular issued by it to the investors on September 12. The prices of the shares of the company fell by 55 per cent on October 21 and by another 10 per cent on October 22.—- Source Agence France Presse (AFP).

TOY INDUSTRY IN A CRISIS

2.Another toy factory in China catering to the US market went bankrupt on October 22 and closed down its production, rendering 900 workers jobless. The toy factory is called the Chong Yik Toy company. It is owned by a Hong Kong businessman and is based in Shenzhen in the Guangdong province. Some of the workers have alleged that they were not paid their salaries for the last four months. Some payments were made to them by the company as well as the local Chinese authorities at the time of the termination of their services. Last week, the Hong Kong listed Smart Union Toys factory in Dongguan in the Guangdong province closed down after terminating the services of 7000 workers. According to the Xinhua news agency, in the first seven months of this year, 3631 small scale enterprises producing toys mainly for the US market have closed down due to a decline in the demand for China-made toys from the US. These enterprises, which have closed down, constituted 52.7 per cent of all toy-making companies in China— Source “South China Morning Post” and AFP.

SHIPPING COMPANIES FACE DIFFICULTIES

3.After the aviation industry, the shipping industry is facing a crisis due to a decrease in demand for cargo space.Share prices of some major shipping companies, which haul bulk freight such as iron ore, coal and grains, have fallen by 50-70 per cent in the past few months.”The global economic slowdown will push some shipping lines into bankruptcy,” Marc Faber, a famed investor and editor of the “Gloom Boom & Doom” report, told AFP. Standard & Poor’s also said this week that the Asian shipping market has suffered double-digit declines on the US-Asia route in June and July, as well as being hit with higher operating costs. There are reports of idle vessels being put to anchor, and question marks over the many orders for new ships that were placed in brighter times, years ahead of expected completion dates. “Pain levels could be high for companies that agreed to pay 2007 top-dollar prices for dry bulk ships, or who agreed to pay high long-term charters,” said an article in the Far Eastern Economic Review this month. Container shipping was hit first earlier this year as demand for Asian-made goods in the US and Europe dropped off.In a chain reaction, Asian factories manufacturing electronics and consumer items for the US and European markets began lowering output, and the need for raw materials has declined.
Container shippers, bulk operators and port authorities across the region are reporting slowdowns. Malaysia’s Port Klang said it had been hit by a decline in cargo handling since the start of October, due to a retail downturn and lower vehicle sales in the US and Europe. The
Shanghai International Port has said that growth in cargo traffic dropped sharply to 9.9 per cent in the first half of 2008 on the “increasingly grave global economy and trade situation”. “Faced with the severe economic situation at home and abroad, the port industry has met with the most complicated operation environment in recent years,” it said. Hong Kong, which is sensitive to any drop in demand for toys, gadgets and clothes made in the factory-belt of China’s southern Guangdong province, said that after an increase of 6.7 per cent in container traffic in August, growth dropped suddenly in September to just 1.2 per cent. “Given the global gloomy economic outlook, Hong Kong is expected to face a much tougher export trade environment,” said Hong Kong Container Terminal Operators Association chairman Alan Lee.
In Taiwan’s seven harbours, volumes fell 2.23 per cent in the nine months to September, and in southern Kaohsiung city, business was down 1.76 per cent. “We are seeing a rapid decline in the volume of exports,” an official with the Japanese Shipowners’ Association said of the decline in demand. Shipping rates have been falling to levels s not seen since the Asian financial crisis in 1997-1998.A so-called capesize vessel, most commonly used to carry coal and iron ore, now costs under US$11,000 a day to hire, about half the charge in May.
Container shipping lines have said they expect cargo demand on the US-Asia route to fall by as much as eight per cent in 2008.
“It’s a safe statement that no carrier is operating profitably in the eastbound transpacific market today,” said Ron Widdows, chairman of the Transpacific Stabilisation Agreement – a forum of major shipping lines. However, the group said vessels are still running at 90 per cent capacity as firms cut costs by consolidating routes and returning chartered vessels, and take advantage of the downturn to lay up ships for repairs.Widdows said the industry was confident that government efforts to unclog global finance would be effective, restoring confidence and paving the way for a shipping recovery in late 2009.—- Source AFP

CONTAINER TRAFFIC DOWN

4. Shanghai’s port, one of the world’s busiest, has cut its container traffic target for the year by five per cent, blaming the global financial crisis and an economic slowdown.The Shanghai International Port Group’s handling volume is expected to reach 28.5 million twenty-foot equivalent units (TEU), less than its earlier target of 30 million TEU.Lower trade volume due to the weakening global economy, slowing domestic growth and natural disasters in China this year have affected the port’s container operations.China’s economy expanded by nine per cent in the third quarter, the lowest level in about five years as the global credit crisis put a dent in its booming economy.The port operator’s container throughput rose 10.4 per cent from a year earlier to 13.82 million TEU in the first half, sharply slower than the growth in 2007, when throughput jumped 20.4 per cent to 26.2 million TEU.In the first nine months of 2008, container processing in Chinese ports rose 14.9 per cent to 94.5 million TEU, 2.2 per cent lower than the first half, according to Ministry of Transport figures.— Source “Shanghai Securities News” and AFP.

MOVE FOR FINANCIAL WATCHDOG

5.Japan, China and South Korea will set up an Asian watchdog body to monitor the health of financial institutions in a bid to counter global economic chaos.They hope to have the first meeting in Tokyo next month and also invite other Asian nations including the 10 members of the Association of Southeast Asian Nations (ASEAN).It would serve as a regional version of the Financial Stability Forum, a panel that advises the Group of Seven major economies and exchanges information among them.Japan also hopes the meeting would discuss enhancing controls on the financial system.The move came as US and European leaders called for an emergency summit in November to discuss ways to restore the battered global financial sector. Japanese Prime Minister Taro Aso is also sounding out whether the South Korean and Chinese leaders can travel to Japan by the end of the year for an inaugural three-way economic summit. Japanese Government officials declined to comment on the reports. —Source “Yomiuri Shimbun” and the Kyodo news agency.

REAL ESTATE

6.China will exempt property transactions from stamp tax and value-added tax from November 1 to boost the ailing real estate market, state media reported on October 22, citing the Finance Ministry.

IMPACT ON SINO-INDIAN TRADE

My comment: The down-turn in the Chinese economy is likely to affect Sino-Indian bilateral trade which has galloped to a record US $ 30 billion and could affect Indian iron ore producers. Iron ore constitutes about 55 per cent of Indian exports to China. With the Olympics over and with the sluggish real estate market and a suspension of the construction of new factories, the demand for steel in China could come down.(22-10-08)\\

( The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai. He is also associated with the Chennai Centre For China Studies. E-mail: seventyone2@gmail.com )

Filed Under: Development, Economy, Exclusive

RHETORIC AND BRAVADO OVER Katchatheevu

October 21, 2008 By

Global Geopolitics Net Sites – Global News Blog
Tuesday, October 21, 2008

© Copyright 2008 Malladi Rama Rao. All rights reserved.

By Malladi Rama Rao

Rameswaram, the holy town on the shores of Bay of Bengal, saw fishermen in an angry mood on Sunday, September 28. Four youth, Murugan, Doraisamy, Ramamurthy and Lingam went out early that day to catch fish. None of them had a boat of their own. They borrowed a boat of Valivittan, who preferred to remain at home. The weather was fine, in deed, very pleasant. And they had a fairly large catch. Naturally these youngsters, who had not seen the inside of a school, were in high spirits. Murugan started humming his favourite tune from the latest Rajani flick. Suddenly, a burst of gun fire snuffed out the life out of the 32 –year-old. He collapsed with bullets hitting his back twice. As his friends brought home his body, a pall of gloom descended on their hamlet, Bagyanathapuram.

Said Doraisamy: “We were fishing in the deep sea near Katchatheevu. Suddenly Sri Lankan navy boats encircled us and opened fire. We were already on our way home. But they chased us and fired at us”.

How sure these illiterate fishermen are that the firing came from the Sri Lankan navy? Already the Sri Lankan Mission in Chennai has asserted that the island’s fledgling navy was not in the vicinity of the area where Murugan came under fire. In fact, the media friendly, Deputy High Commissioner of Sri Lanka, P M Amsa, has gone out of his way to ‘clear’ the air. As reported by The Hindu, Amsa contacted Vice Admiral Wasantha Karanagoda, Commander of Sri Lanka Navy in Colombo, who told him that an ‘oral’ inquiry was carried out and their (SL Navy) personnel were ‘not involved’.

But the victims in Bagyanathapuram are unconvinced. How can you deny what we had seen, they argue, and in an expression of solidarity, 3000 fishermen and 700 boats stayed off the sea. This is the second strike by fishermen in three months.

Records with Rameswaram police and local fishermen association show that attacks on Indian fishermen are not new. There are allegations of SL Navy harassing Indian fishermen in their ‘traditional waters’, which in local parlance means the area in and around Katchatheevu. Amsa is, however, always quick to remark that the possibility of these incidents may have been orchestrated by a third force with vested interests, such as the LTTE, in order “to tarnish the reputation of the Sri Lanka Navy and strain the long standing and warm relations between India and Sri Lanka”, cannot be rule out.

There are not many takers for the Amsa claim amongst the political parties of Tamilnadu. It is not surprising given the emotional quotient of the issue whatever be the views of Colombo based political commentators like Janaka Perera, who spew venom at the very mention of Dravidian parties and Katchatheevu. ‘Objectivity, my foot’, he and his ilk appears to believe, going by the tone and tenor of their writings.

So let me turn to a NGO. Agni Subramanian, Coordinator of the Chennai based Organisation for Protection of Indian Rights Abroad (OPIRA), has no political axe to grind even by the yardstick of Perera. He has led a delegation to Governor Surjit Singh Barnala of Tamilnadu with an SOS from five families-their bread earners are languishing in Anuradhapura jail. Arul Sahayam told the governor that youngest son Joseph Bath (16) went for fishing fun trip, with his brother Ignatius (20) on May 26 and had not returned home.

The Deccan Chronicle reported (June 17, 2008): “With tears in his eyes, Arul Sahayam said when Joseph went with his brother and 21 others to the sea for fishing on May 26, they were caught by the Sri Lankan navy between Katchatheevu and Neduntheevu. While the Lankan navy released 18 of them on June 4, the other five including Joseph and Ignatius are still with the Lankan navy”. The Lankan navy took all the fishermen, including the teenaged student, blindfolded to a place in Thalaimannar and detained on the charge of transporting ‘black powder’ for LTTE, which they denied.

Agni Subramanian met Joseph in the jail. He was told that the boys were arrested, and produced before a judge. Sri Lankan navy officers told the judge that a ‘black substance’ was recovered from below the fishing vessel. Subramanian’s information is that 43 Indians were at present lodged in Sri Lankan jails on ‘false’ drug charges.

Neither Murugan’s nor Joseph’s is an isolated case that has come to cast a shadow over India- Sri Lanka relations. Every fisherman family of Rameswaram and adjoining areas has a story of how inhumanly the Lankan Navy has been treating them, firing at their boats indiscriminately and detaining at will, besides seizing their catch. Some incidents like the two ‘arrests’ in January 2003 are still fresh in their memories.

36 fishermen were taken into custody on the charge of ‘trespassing’ in the first week. Two weeks later, catch (prawns) worth Rs. 60,000 was ‘seized’. After another two weeks (in February) a Lankan Navy vessel hit a mechanized boat owned by Rameswaram fishermen as they were fishing near the international boundary line. A few days later 16 Indian fishermen were arrested and their four trawlers seized again on the charge that they had crossed the water boundary line.

These examples only serve to illustrate the intensity of the problem, which continues to manifest at regular intervals. It also underscores why the political class of Tamilnadu are unanimous that ‘grave’ injustice had been done to their state under the 1974 Katchatheevu agreement. Demands for abrogating the treaty are also being voiced of late by mavericks like Vaiko while Left leaders like D Raja opine that India should ‘re-open’ the treaty signed by two good friends, Indira Gandhi and Sirimavo Bandaranayke.

Muthavel Karunanidhi, the DMK chief minister and his arch rival, Jayalalithaa Jayaram of AIADMK, who ruled the state before him, have been telling Delhi to do something so that the poor, illiterate fishermen are not harassed and victimized in the Gulf of Mannar. More so as the Tribune of Chandigarh points out (Editorial March 8, 2003): ‘Sri Lanka has been honouring the agreement more in its breach than in implementing it’ and as the local (Rameswaram) fishermen complain that they were not taken into confidence at the time of signing the treaty. Public opinion is something no government in a democracy can afford to ignore. Certainly as records show that at least 300 fishermen died since the agreement was initialled

I am certain that both the above observations will invite a howl of protests from my Sri Lankan friends and I am sure they will hurl at me their choicest abuses. In recent weeks and months, many Sri Lankan commentators have become ‘extra sensitive’ over Katchatheevu. They have been straining their every nerve to run down Tamilnadu leaders for the crime of claiming that India had gifted the 285.2 –acre island just 10 miles north east to Rameswaram to Sri Lanka. Many of them have thundered: “Where is the word ‘gifted’ or ‘ceded’ in the agreement”. I concede their point. Neither of these two words figure in the text of the treaty. But what is a treaty after all? Not a piece of paper to be brandished as a sword on high seas that too before people who are unlettered.

Veteran journalist Philip Fernando (presently settled in Los Angles, USA), who had the privilege of reporting on the treaty (in the work) to The Daily News, makes the point when he observes that India and Sri Lanka resolved the issue of Katchatheevu in a ‘spirit of compromise and give and take’. Well, indeed all agreements are exercises in some give and take.

That was the reason why Article 5 of the agreement clearly states: ‘Indian fishermen and pilgrims will enjoy access to visit Katchatheevu as hitherto and will not be required by Sri Lanka to obtain travel documents or visas for these purposes’. And Article 6 records unambiguously: ‘The Vessels of India and Sri Lanka will enjoy each other’s waters such rights as they have traditionally enjoyed therein’.

The issues thrown up by fishermen and Katchatheevu are primarily humanitarian in nature, as Prime Minister Manmohan Singh told President Mahinda Rajapakse, when they met on the sidelines of SAARC summit in Colombo. Viewing the issue through any other prism will greatly undermine the amity between the two countries out of a fit of misplaced bravado. Rhetoric of any kind has the power to sway emotions of the mud heads which should be checked by the level headed.

Arguments like ‘the Indian fishermen were poachers and hence deserve no consideration’ reflect a mindset that is neither here nor there. Maritime boundaries are wonderful to look at on paper and in strategy sessions but these make no sense for a fisherman even if he is on a mechanized boat. The answer to the problem is to help equip the Indian fishermen with instruments that help them get the alert signal once they are near the boundary line. Tamilnadu government in close coordination with the Indian coast guard is already on the job. This work cannot be accomplished overnight. It takes time. Till such time it is completed, patience should be the by-word. .

Various suggestions have been thrown up in recent days to end the Katchatheevu impasse. These range from India retrieving the island (World Tamil Confederation) to taking the island on a lease in perpetuity solely for fishing, drying of nets and pilgrimage (Jayalalithaa Jayaram, AIADMK leader). Better and practical option would be a bilateral agreement under which Colombo agrees to give license to Indian fishermen to fish around Katchatheevu. It will be in synch with tradition and modern times.

Old timers will recall that licensed fishing is not new to India and Sri Lanka. The 1976 agreement that had demarcated the maritime boundary provided for license to Sri Lankan vessels to fish in the Wadge Bank, which is located to the South of Cape Comorin but outside the territorial waters of India under certain terms and conditions for a limited period.

The point to remember is fishermen are not criminals. They are not armed. Treating them inhumanly or naval personnel opening fire on them brings no credit to a civilized society and its government whatever be its spectacular achievements on any other front.

About the Author

Malladi Rama Rao is an analyst and writer on the Indian political scene and geo-political and security issues of South Asia. He directs a Weekly Feature Service in English, Syndicate Features, in colloboration with his wife Vaniram. He is also the India Editor of Asian Tribune.

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B-308, Puneet Apts. B-10, Vasundhara Enclave, Delhi; Ph -22617660 E-mail: syndicatefeatures@rediffmail.com

Filed Under: Conflict, Exclusive, Geopolitics, Terrorism

Bailing Out Pakistan from bankruptcy

October 21, 2008 By

Global Geopolitics Net Sites – Global News Blog
Tuesday, October 21, 2008

© Copyright 2008 Malladi Rama Rao. All rights reserved.

By M Rama Rao

New Delhi (Syndicate Features): As terrorism, a creature of its own creation, starts to devour parts of it, Pakistan finds itself in an economic meltdown that has prompted President Zardari to send an SOS for a $100 billion bail-out to ‘old friend’ United States and ‘all- weather friend’ China as also the three million- strong overseas Pakistanis. Inflation is running at 25 percent; foreign exchange reserves are not even enough to meet a 15-day oil import bill; a $3 bn debt repayment default appears imminent with the Standard & Poor’s placing Pakistan’s sovereign debt just a few notches above the default level.

Islamabad may get a reprieve from both the US and its Western allies and also China extending generous handouts. Not all of this help, from at least the US and EU, which are themselves in learning the limitations of capitalism the hard way, may come in the shape of cash flow. And Pakistan may have to accept the usual bitter pill from the global lenders – IMF and World Bank. It will feel relieved if debt repayments are deferred once again and some emergency aid commitments are promised.

China, with an overflowing foreign exchange reserve of $2 trillion, is in a position to help; well, that was the expectation of President Zardari when he visited Beijing last week. He was cold shouldered. Apparently, China shares the western perception that Pakistan is given to fiscal profligacy and is living beyond its means. It only promised a soft loan of $ 1 billion and made it clear that Pakistan must listen to IMF advisories, which mean less subsidies and more taxes.

Every now and then Pakistan appears on the international stage desperately crying for alms. During his long innings, Gen Musharraf and his ex- Citi Banker Prime Minister Shaukat Aziz had proclaimed that they had achieved an ‘economic miracle’, and heralded a high growth regime to match India’s growth story. These claims stand punctured by the high prices of essential commodities and power shortages that are bringing people on to the streets to demonstrate their exasperation from Peshawar to Lahore to Karachi and Quetta.

Pakistan received massive direct and indirect financial doses after 9/11 on the pretext that having done a U-turn on its policy of supporting Taliban it needed hard cash—apart from military hardware—to combat extremists at home who breed easily in poverty and backwardness. A natural disaster, a powerful earthquake that hit both parts of Kashmir, found Pakistan extending its arms for hard cash to rehabilitate the victims. Munificence came in plenty though it is a different matter that the rehabilitation work of the government was criticised widely for its inadequacies. Importantly, the critics had decided not to make an issue out of the fact that the so-called banned extremist organisations were openly active in the quake-hit areas mixing rehabilitation work with recruitment drives.

All this begs a vital question. How come Pakistan with its claim of being ‘one of the fastest growing economies in the world’ is in frequent need of monetary help when it is never short of funds either for its programmes to constantly upgrade its military machine with the latest warfare gadgets or to finance dubious operations against its eastern and western neighbours?

The generous doses of help from China, in cash as well as military equipment and even clandestine transfer of nuclear weapons technology, can be understood. Both China and Pakistan are joined by a common animosity towards India and they lay claim to Indian territories. Terrorism and religious extremisms may have hit parts of China but the country does not react to terrorism the way the rest of the world does.

So much so, it can be understood if China does not admit that it shares the general belief that Pakistan is the hub of global terrorism. But the US and Europe have hardly hidden their disappointment with Pakistan in waging, at best, a half-hearted war against terror while trying to exploit the terrorism factor to collect massive foreign aid.

A ‘bankrupt’ but nuclear-armed Pakistan will not be a welcome sight, for India or the rest of the world. More so its practice of freely milking the affluent countries in the name of fighting terrorism when it clearly has no intention of eliminating the terror infrastructure that it has created over the years as an adjunct of its (anti-India) foreign policy. When the pressure mounts on Pakistan—usually from the US—to show more seriousness and sincerity in the fight against terrorism it resorts to some cosmetic changes. Sometimes a few militants are captured and handed over to the US—against cash. At other times, stories are planted in the media that a reshuffle in the top ranks of the armed forces has been affected to remove officers suspected to have sympathies for the Taliban types from important posts.

The recent change of guard at the ISI headquarters is a case in point. The previous ISI boss—handpicked by the US ‘pet’ Gen (retd) Pervez Musharraf when the latter was president of the country—was said to be playing a double game in the hunt against the home grown and foreign Taliban militants. But it will be difficult to believe that the new boss will go after the same set of militants and extremists with a gusto as long as Pakistan continues to believe that jehadi terrorism must remain an important part of its foreign policy, which in a nutshell looks to ‘re-taking’ Afghanistan for ‘strategic depth’ and ‘bleeding’ India into surrender of Kashmir..

Those who argue that with the ‘free run’ terrorists are enjoying across the country, Pakistan has no option but to turn away from its old policy of nurturing and supporting the jehadi marauders. The proceedings of the ‘in camera’ of Parliament session held for a briefing by the ISI boss show such optimism is misplaced. Most members shied away from any implicit and categorical denunciation of Islamists and Jehadis.

In fact, as both The Dawn and The News International noted on October 19, only as few as 60 of the total 442 MPs were present in the special session. Even the benches of the ruling party remained empty, suggesting not only little interest but also a lack of discipline, given that the party leadership had several times urged everyone to attend. The high rate of absenteeism is rather odd since the session was called to evolve a national consensus on terrorism. The Islamist JUI speaking like the spokesperson of the Taliban demanded that military operations be called off in Swat and Fata, for instance.

The quality of discussion was anything but reassuring, according to reports in Pak media. The session was marked by an exchange between a senior PML-N member and the federal information minister on whether the testimony of two women was equal to one man. Such theological debates will not get Pakistan very far in the global war on terror, which President Zardari says is Pakistan’s own battle within its territory, and the economic meltdown, to name but a few challenges. .No surprise, therefore, bemoaned a leading Karachi daily editorially: “Pakistan politicians have rarely demonstrated the dedication and will required taking a country past crisis and to success”.

The mainstream Pakistan politicians have always supported the jehadi terrorists whom they call ‘freedom fighters’. Those among them who double as ‘real terrorists’ striking within Pakistan may be a cause for worry; maybe some ‘rogue’ elements in the army support them. But the overriding interest in Pakistan is in retaining the terrorist network to further its foreign policy objectives. Frankly, Pakistan is not in a hurry to give up the policy of ‘running with the hare and hunting with the hounds’. This policy worked before President Zardari. It will work during and after Zardari rule also. In fact, as long as powerful governments really matter on the global theatre are not keen on any accountability from the recipient of their charity. (Syndicate Features)

About the Author

Malladi Rama Rao is an analyst and writer on the Indian political scene and geo-political and security issues of South Asia. He directs a Weekly Feature Service in English, Syndicate Features, in colloboration with his wife Vaniram. He is also the India Editor of Asian Tribune.

SYNDICATE FEATURES

B-308, Puneet Apts. B-10, Vasundhara Enclave, Delhi; Ph -22617660 E-mail: syndicatefeatures@rediffmail.com

Filed Under: Exclusive, Politics, Terrorism

From Singur to Sanand, BAD ‘M’ Haunts TATA’S GOOD ‘N’

October 21, 2008 By

Global Geopolitics Net Sites
Tuesday, October 21, 2008

© Copyright 2008 Malladi Rama Rao. All rights reserved.

By M RAMA RAO

New Delhi (Syndicate Features): Nano has said good bye to Singur and moved to Sanand in Modiland but has not given up its Mamata fixation. This is clear from Ratan Tata’s address to the youth of West Bengal. The tone and tenor of the letter is un-Tata like. And it means the last word on Tata-Singur-Mamata saga is yet to be heard.

By temperament, Ratan Tata is a low key industrialist. He is not at all byte-friendly.. Nor is he a proverbial media savvy tycoon. So, what prompted him to issue an ‘open letter’ as a paid advertisement in four Bengal dailies? Also what made him to hold aloft a certificate for Buddhadeb Bhattacharjee, the wronged comrade?

There are no ready answers. Tata camp claim’s that the advertisement was prompted by the taunts of Didi and the charges levelled against him and Tata Motors. But this contention doesn’t cut much ice. Because Ratan Tata took recourse to a language politicians are known to use; run of the mill industrialists, whether they are steeped in the Dirubhai traditions or not, generally try to keep politicians of all hues in good humour. For them, neither money nor politics has colour.

Ratan Tata, the architect turned business leader, was very direct in his letter. Absolutely no mincing of words. “The people of West Bengal, particularly the younger citizens, will need to express their views and aspirations as to what they would like to see West Bengal become in the years ahead”, he observed while briefly touching upon Nano’s Singur tryst that ended on Oct 3.

“Would they (people and youth of WB) like to support the present government of Buddhadeb Bhattacharjee to build a prosperous state with the rule of law, modern infrastructure and industrial growth, or would they like to see the state consumed by a destructive political environment of confrontation, agitation, violence and lawlessness’, he asked raising the hackles of Mamata Didi, and her new found ally, Amar Singh besides Sonia Congress and the Marxist baiters like Forward Bloc and RSP. Thundered Amar Singh: ‘people in Singur are more interested in ‘atta’ than Tata.”

Tata went on to charge Mamata: ‘Unfortunately, the confrontation by Trinamool Congress led by Mamata Bannerjee and supported by vested interests and certain political parties, opposing the acquisition of land by the state government, have caused serious disruptions to the progress of the Nano plant’. Explaining the reasons for the migration to ‘Vibrant Gujarat’, he said, he had made an appeal on August 22 to usher in a more congenial environment, but ‘unfortunately, the response to the appeal was escalation of the hostilities’.

Expectedly, the Mamata camp has ticked off Ratan Tata and asked whether he was going to be the Marxist trumpeter. They are planning a defamation suit. Whatever be the outcome of the Mamata-Ratan bout, one thing is clear. Tata’s letter reflects the growing sense of frustration amongst the entrepreneurs of the country at the tendency of those in opposition to make everything and anything a political football. Why did not other industrialists rally behind Tata Motors’ chief? Well, this is India that is Bharat, as late Babu Rao Patel used to say.

Nano may have moved out of Singur but Mamata Bannerjee is not resting, She is bracing for a fresh round of agitation this time for the return of land to farmers; she has the good company of the Revolutionary Socialist Party (RSP), which has already made the demand ignoring ‘coalition dharma’.

Like ‘Didi’, RSP (Forward Bloc also for that matter) is too looking for political leverage in rural West Bengal with an eye on the coming Lok Sabha elections and beyond. They will look for a Nano effect in Howrah municipality elections slated for end November, The civic body is presently under the Marxist control.

Buddhadeb’s loss was Narendra Modi’s gain. He pipped Rajasekara Reddy (AP), Yeddyurappa (Karnataka), Navin Patnaik (Orissa) and the flamboyant Vilas Rao Deshmukh (Maharashtra) and rolled out the Nano Map in Nanoseconds on October 7 to mark his seventh anniversary in office as chief minister. Ratan Tata was thrilled. “This is an extremely momentous day for us”, he declared as he inked a memorandum of understanding (MOU) at the Gandhinagar Sachivalaya, and said with a twinkle in his eye, “If possible, we would have shifted to our new home (Sanand, about 25 km from Ahmedabad) in a day”.

Tata Motors will take at least one year to construct the Rs. 2000 crore mother plant with a capacity of 5 lakh cars, up from 3 lakh cars planned initially. Much of the machinery is at present at Singur. It will take time to relocate them and the assets of Nano vendors, who too have suffered in the Mamatatrics. Loss to both Tata Motors and the vendors is put at a staggering Rs. 1000 crore.

Nano roll out plan is now slipped to middle of next year. Soft launch will, however, take place in November as planned using the company’s infrastructure at Pantnagar, Uttarakhand. Formal launch is set for Dec 23, as birth day gift to Ratan Tata, who says, ‘Aapne aanhiya na chhiye’ (we belong to Gujarat) – a reference to the fact that the Parsis had made Gujarat their home when they came to Indian long years ago.

Reports from Ground Zero, however, say Singur effect is haunting Modi-Tata combine. A newly formed local organisation, Rashtriya Kisan Dal is determined to spoil the party. Its President H K Thaker has filed a PIL in the Gujarat high court challenging Sanand land allocation to Tata Motors. His case is that 23 Rajput families had given this very land to the British government in 1902 on a 99-year lease. The Anand Agriculture University came up on the land nine years later in 1911.

The lease period ended in 2001 but the land was not returned. Instead it has been given away to the Tata Motors. ‘What about our compensation’, ask locals like Manuba Vaghela. ‘We will resort to satyagraha if Modi sarkar doesn’t relent’, he threatens.

Asks Thaker: ‘How could the government change the use of the land without compensating the original farmers’. He alleges that the Modi government had incurred a loss of Rs 1,796.95 crore in order to benefit the Tatas for its Rs 1,500 crore project.

The Gujarat Congress also has chipped in. It has invoked the Right to Information (RTI) Act to know the ‘details’ of the deal signed between the Gujarat government and the House of Tatas. ‘We have made an application under the RTI Act …. We have asked for details of the incentives being given to the company for setting up the Nano Car plant’, Congress spokesperson Arjun Modhvadia said. The Congress party has also come out in support of the farmers demand for compensation.

Why did the Congress adopt the Mamata route in Gujarat while swearing by economic reforms and liberalisation in Delhi?

Said Modhvadia: “As an opposition party, we should have got the details of agreement, but this government has not given us any information on the deal. So we had to resort to RTI. At least, we are assured to get some answer within 30 days”.

So, some ‘M’ is going to haunt Ratan Tata even as he made the transition from one bad M (Mamata) to one good M (Modi) with deal clinchers that were better than Bengal’s – land at Rs. 1100 per sq metres on staggered payment basis, deferred payment of VAT over 5-7 years and infrastructure worth Rs. 100 crore including roads, power, drainage, water an effluent treatment plant. And in the process pushed the price of land in Sanand belt. (Syndicate Features)

About the Author

Malladi Rama Rao is an analyst and writer on the Indian political scene and geo-political and security issues of South Asia. He directs a Weekly Feature Service in English, Syndicate Features, in colloboration with his wife Vaniram. He is also the India Editor of Asian Tribune.

SYNDICATE FEATURES

B-308, Puneet Apts. B-10, Vasundhara Enclave, Delhi; Ph -22617660 E-mail: syndicatefeatures@rediffmail.com

Filed Under: Development, Economy, Exclusive, Politics

DRAGON TURNS INTO ROBERT CLIVE

October 21, 2008 By

Global Geopolitics Net Sites
Tuesday, October 21, 2008

© Copyright 2008 Malladi Rama Rao. All rights reserved.

By Malladi Rama Rao

Sinologists are obsessed these days with Hun Chinese obsession to dominate other nations in their vicinity. Scholars of all hues admit that today’s China is different and yet harp on Mao’s favourite Chinese adage: “If the east wind doesn’t prevail over the west wind, then east wind will prevail over the east wind”.

Take for instance its Nepal policy. Beijing had supported King Gyanendra when he was fighting the Maoists. And armed his army to the teeth. Says David G Wiencek, President of International Security Group: “Although the Maoist insurgency was explicitly based on the Chinese model, Beijing denied any links and had gone out of its way to distance itself from Nepal’s Maoists for the sake of advancing its border interests”. A reality check Kathmandu, however, tells us that Beijing had maintained ‘ties’ with the Maoists too. So, when the Maoists slipped into the driver’s seat in Kathmandu, China changed sides with effortless ease, rolled out the red carpet to Prime Minister Prachanda on his maiden overseas visit to Beijing, and increased its aid to Nepal to 120 million Yuan, up from 80 million Yuan given earlier.

Pragmatism has been the hallmark of Chinese foreign policy. Socialism or the so called Third Worldism has no place in its scheme. Nor does it have any place for Western agenda of free markets and democracy, according to Alex E Fernandez Jiberto and Barbara Hogenboom of the University of Amsterdam, who have made a close study of China’s growing economic and political power. For China, trade is a tool as it set about globalising its economy, courting governments aggressively with no political questions asked and with no concern for the local civil societies. A departure from the ‘idealistic sixties and the seventies when liberation movements were the flavour of the day. And this stooping to conquer has forced Chinese government to set up a Department of External Safety to worry about companies and workers in the line of fire in countries hit by political turmoil.

China has adopted ‘daguo xintai’ (great power outlook), shed its long held ‘shouhaizhe xintai’ (victimised nation feeling), and has begun to straddle the world proving Napoleon right for once. Two centuries ago, the great warrior had said: “There (China) lies a sleeping giant. Let her sleep. For when she wakes, she shall shake the world”. The sleeping giant has woken up by the realisation that being a big shark in the sea of foreign direct investment (FDI) alone is not enough and that it must promote investments to tap new energy resources needed to sustain the scorching pace of its development.

A Chinese foreign policy expert argues that his country will never indulge in hegemonic behaviour even when it enjoyed hegemonic power. Peace and development across the world and the Chinese economic goals can flourish side by side, according to him. Nepalese traders who go regularly to Tibet and beyond with their merchandise are unlikely to agree with the scholar. A report in a leading News Portal of Kathmandu says, the Chinese adopt a take it or leave it approach. “All their (Chinese) documents are in Chinese. Raise any question. The standard reply is refer to Beijing. They are producing clones of our local brands. Even for Vanaspati. All this poses a threat to our nascent industry”, a trade chamber was quoted as saying.

Interestingly, Nepalese scholars like Tara Dahal, have been viewing their country as a ‘Transit State” between India and China with immense trade possibilities. China too appears to subscribe to the view since it has begun to talk about plans to extend the Shanghai – Lhasa railway line into most of Tibet and into Nepal. There are 28 passes on Nepal – Tibet border but only three are open and functional through out the year. The Raxual-Kathmandu-Khasa road links India, Nepal and China It is a 390 lm long road. But Barhabise-Kodari part of Northern Nepal road turns into a long puddle during the rainy season. Marketing and trading infrastructure is also absent on either side of Nepal-Tibet border. Yet, King Gyanendra who first spoke of the ‘grand concept’ first at the Afro-Asian summit in Jakarta in April 2005, and his ‘democratic’ successors are convinced that ‘transit state’ route is the ‘development manna’ for landlocked Nepal as it battles to protect national economy from two evils- regional competition and cross border smuggling.

Trade pundits, however, point out that low cost goods from China are flooding the Kathmandu Valley and the plains of Terai, both officially and unofficially. “For us the threat is from China. India is no match in dumping (goods by China), and quantity-wise”, they say, pointing out that India itself has become a huge grey market for cheap Chinese goods that range from toys to computer chips and even photos of Hindu Gods and Goddesses.

In a sense, the Nepalese business community is echoing the views expressed in an Australian E-Journal of social and political debate. Writing on June 20, 2005, Tony Henderson, a freelance writer and chairman of the Humanist Association of Hong Kong, said ‘When it comes to China and the stance of its neighbours, caution is the by-word; trade is the catch-word”. According to him, ‘expressions of benign intent included in China’s media releases, while acceptable, may be seen more like a silver lining in a Nimbus –like thunder cloud, because China’s history is not quite that depicted in its rosy statements to the world’.

Take river waters, for instance.

The Himalayas give rise to all the main rivers of Asia and form a natural boundary on the south-west just as the Altai Mountains do on the north-west. Countries that share China’s rivers voice strong complains about uncaring attitude of the Communist big brother, who runs his empire even in the 21st century like a Sicilian Mafioso.

What has happened to the Mekong has been well documented. From its headwaters on the Tibetan Plateau, the river, known in Tibet as Dza-Chu, China as Lancang Jiang and Thailand as Mae Nam Khong, traverses 4800 km before it falls into South China Sea. The river basin is nearly the combined size of France and Germany. Initially, China refused to join the Mekong initiative and later on in the Mekong River Commission (MRC). It became a ‘dialogue’ partner only in 1996. From April 2002, China began providing daily water level data to the MRC during the flood season. It is still reticent in providing information about dry season flows and the operation of its dams.

Many Sinologists believe that Chinese leaders still take a passive approach to world affairs. According to them, China tries to maximise its interests through minimal involvement abroad and opts to claim the high moral ground. Two American strategic experts Evans S Medeiros and M Taylor Fravel don’t agree. “In the last 10 years, Chinese foreign policy has become more nimble and engaging than at any other time in the history of the People’s Republic,” they say (Foreign Affairs, November/December 2003). Accompanying these ‘changes in substance’ has been a new Chinese campaign to publicise and promote the country’s foreign policy.

Liu Huaqiu, director of the State Council Foreign Affairs Office, seconds their theory in his in-depth analysis of China’s foreign policy as well as its major readjustments and diplomatic achievements since 1949 (Qiushui Magazine, December 1, 2007). His hypothesis is that the basic goal of China foreign policy is to adopt a ‘positive’ attitude towards safeguarding world peace in a bid to ‘create a long term peaceful international environment for China’s socialist modernization drive’.

It may be true. What is equally true is that China operates without any political strings and adopts a policy of trading, investing and providing aid without regard to ‘whether its partner is a democratic visionary or a tyrant’. And as the experience of the world from Darfur to Zimbabwe and from Pakistan to Bangladesh, Myanmar and North Korea shows, China’s silence has been boosting tyrants. It is giving the dictators the means to resist the global pressures.

The United States contributed no less to the emergence of trade centric China. Under President Bill Clinton, the White House went out of its way to allow commercial interests to dominate other concerns in shaping policy towards Beijing. That is beside the point and going into Sino-American ties only offers a digression. The fact of the matter is that China plays on both sides of the local divide when necessary with no qualms whatsoever as pointed out at the outset in Nepal. It just did the same ‘in-thing’ over the years in India, Myanmar and Sri Lanka, for instance. Also it picks up ‘willing proxies’ like Pakistan against India, for instance, in the classic Chinese mode of ‘breaking the enemy’s resistance without fighting’.

All this quest is for a strategic reach. And the pursuit is for access to and control over raw materials across three continents to secure the badly needed edge in the present day unipolar world. To what extent success comes China way is a moot point since its long term ally has failed to achieve its own goal of strategic depth beyond the Durand Line. What is not, however, is its lack of commitment to counter terrorism. Noted Sinologist, Bhaskar Roy opines that China’s commitment to counter terrorism has always been suspect particularly from 2002.

The issue came upfront early August with a court in Los Angeles taking up a case against ‘The Bank of China Ltd’, the third largest Bank of mainland China. The charge is that the Chinese bank was knowingly involved in financing Islamic Jihad and Hamas between 2004 and 2007. The money ‘transfers’ route was West Asia – US- Guangzhou- West Bank, Israel and the Gaza Strip. Such money laundering after 9/11 fits in well with the image of China as the modern day Robert Clive out to make a fast buck in league with gun runners, narco traders, insurgents, terrorists and black marketers and to carve out ‘a new empire’.

China has its own ‘in-house’ Islamists and insurgents in Xinjiang. Therefore, the least expected of Beijing is an understanding, if not sympathy for countries like Sri Lanka and Myanmar, where hundreds of innocents have fallen victims to the Mao’s dictum- power through the barrel of a gun. Double dealing is a standard fare in the text books for sleuths but how can a country that lays claim to super power status justify double dealings with the very nations which it is courting and is offering strategic infrastructure to secure for itself an elusive strategic reach through Gwadar, Sittwe and Hambantota.

About the Author

Malladi Rama Rao is an analyst and writer on the Indian political scene and geo-political and security issues of South Asia. He directs a Weekly Feature Service in English, Syndicate Features, in colloboration with his wife Vaniram. He is also the India Editor of Asian Tribune.

SYNDICATE FEATURES

B-308, Puneet Apts. B-10, Vasundhara Enclave, Delhi; Ph -22617660 E-mail: syndicatefeatures@rediffmail.com

Filed Under: Exclusive, Geopolitics, History, Politics

Did India have to do the nuclear deal?

October 16, 2008 By

Global Geopolitics Net Sites
Thursday, October 16, 2008

© Copyright 2008 Susenjit Guha. All rights reserved.

By Susenjit Guha

Way back in the 1950s and early 1960’s, U.S. media couldn’t really figure out why India’s first Prime Minister Jawaharlal Nehru was not as comfortable in the United States as he apparently was during his trips to Britain and Western Europe.

Even though former U.S. President John F. Kennedy failed to charm him during a White House visit, journalists noticed that Nehru’s eyes lit up when his wife Jacqueline entered the room.

Later, Nehru’s daughter Indira Gandhi had her famous face-off with U.S. President Richard Nixon and Secretary of State Henry Kissinger in 1971 – the latter going on record as having used the choicest of expletives over her “obduracy.”

Critics pointed out that India had missed the Greyhound bus many times. First, it was non-alignment, then a strategic partnership with the Soviet Union during the Cold War years, to counter the U.S. alliance and obsession with India’s arch foe, Pakistan.
[Read more...]

Filed Under: Exclusive, History, Nuclear Weapons, Politics, United States
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