Modi’s risky Pakistan gambit  

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Brahma Chellaney, Hindustan Times, February 18, 2015

05e72e3c-1844-451c-a1b4-d7787ddfa22fwallpaper1After nuclear concessions to America on accident liability and parallel safeguards, Prime Minister Narendra Modi is now opening talks with Pakistan, as sought by U.S. President Barack Obama. The charade of sending the foreign secretary on a SAARC tour so as to create a cover for discussions in Islamabad cannot obscure the fact that Modi has reversed course and agreed to reopen talks with Pakistan unconditionally. His move, oddly, came right after hostile statements on India by Pakistani Prime Minister Nawaz Sharif and his foreign policy adviser, Sartaj Aziz.

The sequence leading to the resumption of talks undergirds the Obama effect: Separately in January, US Secretary of State John Kerry at the Vibrant Gujarat Summit and Obama in New Delhi exhort Modi to reopen talks with Pakistan. Then this month, Modi sends his petroleum minister to Pakistan for discussions on the planned U.S.-backed gas pipeline from Turkmenistan. Soon thereafter, Obama telephones Sharif, who rails against India. Just hours later, Modi calls Sharif and sings peace, conveying his decision to send his foreign secretary to Islamabad.

At the chai per charcha with Modi, Obama focused largely on one issue: Pakistan. A defensive Modi, instead of questioning the U.S. policy of propping up Pakistan with munificent aid and arms and thereby emboldening its hostility toward India, explained to Obama that he wanted to open talks with Pakistan after the Peshawar killings but was compelled to put off the decision due to continued Pakistani ceasefire violations and the attempt to free U.N.-designated terrorist Zaki-ur-Rehman Lakhvi. Modi even pointed out that, as a friendly signal, he telephoned Sharif after the Peshawar attack and made Indian schools honour the victims with a two-minute silence.

Among Obama’s first actions after returning home from India were to unveil more than $1 billion in fresh aid to Pakistan in his budget proposals and to invite Chinese President Xi Jinping on a state visit, while his ambassador in India made clear that the U.S. will work with India and Pakistan to promote “constructive dialogue” between them. Pakistan remains a top recipient of US aid. Unable to certify to Congress that Pakistan is preventing its territory from being used for terror attacks, Obama has used a national-security waiver to keep aid flowing to the world’s Terorristan. Such aid has encouraged Pakistan’s generals to nurture terrorist surrogates, rapidly expand their nuclear arsenal, and call the shots in domestic policy.

Consider this jarring paradox: Obama twice lectured a secular and diverse India in recent weeks on religious tolerance, only to get Modi to open talks with the Islamic republic where non-Sunni minorities are methodically being decimated. But what prompted Modi — who has projected a nimble, non-doctrinaire foreign policy with pragmatism as its trademark — to yield to pressure that he could have resisted?

Modi is opening talks at a time when the Sharif government is very weak. Pakistan’s power balance has titled decisively in favour of the other Sharif who is the Army chief, with the military savouring its triumphs in a series of bruising clashes with the government. The military is firmly back in the driver’s seat without staging an overt coup. The politically impotent Sharif is in no position to pursue rapprochement with India.

Yet Modi has yielded ground even on the issue that led to the cancellation of the last round of talks, with his government conveying to Pakistan that its high commissioner in New Delhi can meet Hurriyat separatists on any occasion other than when official talks are about to begin. Modi’s zigzag suggests that, despite his proactive diplomacy, he has yet to fully fix the broken Pakistan policy that he inherited from Manmohan Singh, whose 10-year tenure was marked by escalating cross-border terrorism even as Singh sought peace with Islamabad at any price.

The Pakistani military, as its intense ceasefire violations since last summer have shown, is intent on shining an international spotlight on the Kashmir issue, not on altering the India-Pakistan dynamic through improved bilateral relations. Talks with India under a tottering civilian government that is in no position to compromise on any issue suit the generals’ agenda. By reviving pairing with India, bilateral talks allow the country that risks failing to regain strategic relevance, including by highlighting the issue closely tied to its generals’ extraordinary power and privilege — Kashmir.

In this light, the renewed “peace process” can produce more process but no peace. Fresh talks are unlikely to alter the calculus of the Pakistani establishment, which is determined to checkmate India’s rise by whatever means — fair or foul — it deems advantageous. Terrorism is one favoured instrument.

In statecraft, talks are a means to an end, not an end in themselves. However, the Modi government is focusing just on the means — the process of talks — knowing well that India can secure no end in a situation where Pakistan’s generals are wielding increasing power and the Pakistani foreign ministry is a weak actor. Opening talks without any prospect for meaningful progress is not sound diplomacy. It risks sending the wrong message and inviting greater aggression. Modi’s Pakistan gambit could embolden the sponsors of terror to step up cross-border attacks, as happened under the cover of previous “peace” talks. Army chief Dalbir Singh recently cautioned, “The terror infrastructure in Pakistan is still intact,” with new terror attacks in Jammu and Kashmir showing “Pakistan’s desperation.”

Modi’s dynamism and motivation in diplomacy in the past months has spurred hope of Indian foreign policy finally gaining a distinct geostrategic imprint and direction. His recent actions, however, highlight what has long blighted foreign policy — ad hoc and personality-driven actions that confound tactics with strategy. To advance long-term national interests, Modi must embrace institutionalized, integrated policymaking.

Brahma Chellaney is a geostrategist, author and professor.

© The Hindustan Times, 2015.

India’s diplomatic overinvestment in the civil nuclear deal with America: Why it makes little sense

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BY BRAHMA CHELLANEY
The Japan Times

p6-Chellaney-a-20150212-870x655During U.S. President Barack Obama’s recent India visit, a stalled, decade-old civil nuclear deal took center-stage, with the two sides announcing a breakthrough on the contentious issues blocking its implementation — a development that promised to potentially open the path for a Japan-India nuclear deal. It now appears that the breakthrough was more hype than reality and that there is little prospect of the U.S.-India deal’s early commercialization.

With Indian Prime Minister Narendra Modi by his side, Obama announced that “we achieved a breakthrough understanding on two issues that were holding up our ability to advance our civil nuclear cooperation.” The two issues identified were nuclear accident liability and the administrative arrangements to govern the bilateral nuclear cooperation agreement — the successor to an accord the United States unilaterally terminated after India detonated a nuclear device in 1974.

U.S. officials said India agreed to address American concerns over its liability legislation by setting up a $245 million nuclear insurance pool and issuing a “memorandum of law” — essentially an executive action. The Indian foreign ministry, for its part, said “the deal is done,” with the two sides having “reached an understanding on civil nuclear liability and finalized the text of the administrative arrangements.”

But it has now become apparent that the U.S. and India are still locked in negotiations to tie up loose ends and that the much-trumpeted breakthrough was little more than an effort to project a substantive advance during a presidential visit rich in pageantry and symbolism. Obama was the chief guest at India’s Jan. 26 Republic Day parade, a year after Prime Minister Shinzo Abe had that honor.

While claiming a breakthrough, neither side released any details, including on how another sticking point had been resolved: a U.S. demand that New Delhi accept nuclear-material tracking and accounting arrangements that go beyond the safeguards system that the International Atomic Energy Agency (IAEA) has approved and applied to nuclear-armed India’s civilian nuclear program. The U.S. demand entails establishing, on top of the IAEA inspections system, a bilateral safeguards system — an elaborate and expensive arrangement in which India would separately track and account for nuclear materials “by flag” (that is, by each national origin).

The same stumbling block over parallel safeguards in perpetuity has held up India’s conclusion of nuclear deals with Japan and Australia but not with Canada, which dropped that demand. Shortly after Modi took office last May, the Indian foreign ministry conveyed to Tokyo that concluding a nuclear deal must take centerstage during a Modi visit to Japan. Even though Modi postponed his Japan visit by several weeks for unrelated reasons, negotiations failed to yield a deal.

Australia has no nuclear power program, despite holding the world’s largest uranium reserves, and can only offer to export yellowcake, which India is already sourcing amply from other suppliers. Japan’s importance, by contrast, is underscored by two facts: It is the world’s leading supplier of heavy nuclear forgings, with just one Japanese company — Japan Steel Works — controlling 80 percent of the global market for large forged components for light-water reactors (LWRs); and the U.S.-based Westinghouse is owned by Japan’s Toshiba, while another reactor vendor, GE-Hitachi, also headquartered in the U.S., is jointly owned by America’s GE and Hitachi of Japan.

India, pointing out that IAEA safeguards guarantee that all its imported materials are accounted for and devoted to peaceful purposes, has resisted the demand for establishing additional safeguards with America (and Japan) bilaterally, saying this would amount to assuming onerous obligations not envisaged even in the original U.S.-India nuclear deal of 2005.

While the “flagging” arrangements sought by the U.S. and Japan are strictly a government-to-government issue, nuclear liability has become a bone of contention between the Indian government and the firms seeking to export commercial reactors to it — the two U.S.-Japanese private companies, France’s state-controlled Areva and Russia’s Rosatom. The U.S. government, however, has also weighed in against the Indian liability law, calling it an obstacle to the deal’s commercialization.

To be sure, India and the U.S. have made considerable progress in recent months on resolving the sticking points, although a final deal has yet to be clinched. Progress has come mainly due to Indian concessions. But as U.S. Assistant Secretary for State Nisha Biswal admitted last week, the two sides are still “trading paper” and working to stitch up the deal.

The Modi government has yielded ground, even at the risk of facing criticism at home. For example, it has agreed to reinterpret domestic law so as to effectively transfer reactor vendors’ nuclear accident liability risks to Indian taxpayers. Indian law allows suppliers to be held liable in case of an accident. The government is also reinterpreting another provision of the law to bar victims of a nuclear accident in India from suing for damages in the U.S.

These actions are likely to prove controversial, given India’s bitter experience over the 1984 gas leak from an American-owned Bhopal city plant that killed about as many people as the Fukushima disaster. Indeed, Japan’s dual liability laws, which indemnify suppliers and make plant operators exclusively liable, should serve as a sobering lesson for India: GE built or designed all the three Fukushima reactors that suffered core meltdowns in 2011, yet the U.S. firm went scot-free, despite a fundamental design deficiency in the reactors.

To deflect supplier liability, New Delhi — besides creating a nuclear insurance pool to cover suppliers — is issuing a “memorandum of law” incorporating its legal reinterpretations and authoritative clarifications as well as the understandings it has reached with America. But this raises a basic legal question: How can a “memorandum of law,” with no legislative imprimatur and backed merely by the Indian attorney general’s opinion, reinterpret a statute in a way to effectively gut it? Given that such reinterpretation could be challenged in Indian courts, U.S. officials are advising Westinghouse and GE-Hitachi to make their own risk assessment to decide whether to enter the Indian nuclear market.

On the issue of parallel safeguards, New Delhi has agreed to go more than half-way to meet America’s demand, which springs from its Henry J. Hyde Act, enacted in 2006 to govern the nuclear deal unveiled the year before. The Hyde Act calls for a “detailed system of reporting and accounting” of exports to and retransfers within India, including an annual independent audit about the form, amounts and location of exported items.

India will establish a data-sharing and material-accounting mechanism with America. Its “flagging” of materials by nationality will also involve tracking items sourced from third countries but used in U.S.-origin reactors. Yet U.S. House Foreign Affairs Committee Chairman Edward R. Royce has criticized this arrangement as not adequate.

With complex legal, pricing and other issues still pending, the deal’s commercialization is anything but imminent. In fact, the two sides are yet to sign the administrative arrangements, which they announced had been “finalized.”

It is an open question whether the deal will ever yield substantive energy benefits for India, given the exorbitant price of foreign-origin reactors, the concomitant need for India to heavily subsidize the electricity from such plants, and grassroots safety concerns over the Fukushima-type multi-plant nuclear parks earmarked by India for Westinghouse, GE-Hitachi and Areva, each of which is to sell prototype LWR models presently not in operation anywhere in the world. The accident-stricken Fukushima reactors were also the first of their kind.

Adding to India’s risks is its plan to induct a multiplicity of different LWR technologies from the U.S., France and Russia. This will also exacerbate its maintenance challenges.

Consider another issue: Years after the U.S. pledged to bring India into four American-led technology-control cartels — the Nuclear Suppliers Group, Missile Technology Control Regime, Australia Group, and Wassenaar Arrangement — India is still pleading for its admission, with Obama merely reiterating America’s support for India’s “phased entry” into these groups. India now intends to file a formal application for admission to each cartel, in the hope that the U.S. would be more forthcoming in its support than it has been so far.

The Obama visit was a testament to how hyping the nuclear deal obscures more important issues. For example, despite the vaunted U.S.-India Defense Technology and Trade Initiative (DTTI), the U.S. side refused to accept any of the six joint high technology projects proposed by India, insisting that New Delhi first sign “foundational agreements” on military logistics and communication interoperability that America has designed for its allies in a patron-client framework. India, which seeks a level-playing field, is America’s strategic partner, not its ally. The four joint projects announced during the visit are for relatively modest defense products.

photo from TNuclear power faces an uncertain future, with few new reactors under construction in the West. Yet India has continued to place the nuclear deal at the hub of its relationship with America. Washington has obligingly pandered to this Indian weakness, entering into protracted implementation-related negotiations. The original deal had already spawned multiple subsidiary deals before Obama announced a “breakthrough” on two more auxiliary deals. Each deal has been hailed by New Delhi as a diplomatic success, regardless of the concessions it had to make or the new obligations thrust upon it.

It is past time for India to reduce the salience of the nuclear deal in its relations with America and prioritize other issues concerning its core interests. Why a deal to import reactors to generate an increasingly uneconomical source of energy is critical to Indian interests has never been elaborated by the deal pushers in India other than through beguiling slogans, such as “End of nuclear apartheid against India” and “A place for India at the international high table.” Such imports will create thousands of jobs for American workers but will be out of sync with Modi’s “Make in India” initiative to expand domestic manufacturing base.

India’s diplomatic overinvestment in the nuclear deal has only made it harder for it to address more fundamental issues in its ties with the U.S., including an increasingly one-sided defense relationship. Rarely before has America acquired a major arms client of the size of India so rapidly. It will take concerted efforts, without being weighed down by the nuclear deal millstone, to forge a true, enduring U.S.-India partnership.

Brahma Chellaney, a longtime contributor to The Japan Times, is a geostrategist and the author of the award-winning “Water: Asia’s New Battleground.”

© The Japan Times, 2015.

Japan’s Constitutional Albatross

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A column internationally syndicated by Project Syndicate.

downloadThe approach of the 70th anniversary of Japan’s defeat in World War II has sparked much discussion – and lamentation – of East Asia’s resurgent historical feuds. But recent tensions in the region may partly reflect a lack of progress in another, overlooked area: Japanese constitutional reform. Indeed, despite the powerlessness so vividly highlighted by the Islamic State’s beheading of two Japanese hostages, Japan has not adopted even one amendment to the “peace constitution” that the occupying American forces imposed on it in 1947.

At first glance, this may not be altogether surprising. After all, the constitution served an important purpose: by guaranteeing that Japan would not pose a military threat in the future, it enabled the country finally to escape foreign occupation and pursue rebuilding and democratization. But consider this: Germany adopted an Allied-approved constitution under similar circumstances in 1949, to which it has since made dozens of amendments.

Moreover, whereas Germany’s constitution, or Basic Law, authorized the use of military force in self-defense or as part of a collective security agreement, Japan’s constitution stipulated full and permanent relinquishment of “the threat or use of force as a means of settling international disputes.” Japan is the only country in the world bound by such restrictions – imposed not just to prevent a militarist revival, but also to punish Japan for its wartime government’s policies – and continued adherence to them is unrealistic.

That is why Japanese Prime Minister Shinzo Abe has made constitutional reform a high priority. Having cemented his authority in December’s snap general election, in which his Liberal Democratic Party won a decisive victory, Abe is determined to pursue his goal of building a stronger, more competitive Japan – one that can hold its own against an increasingly muscular China.

Abe’s effort to “normalize” Japan’s strategic posture began with a reinterpretation of Article 9 of the constitution, according to which the country would henceforth be allowed to engage in “collective self-defense.” Japan’s government approved the change last summer, and the United States backed the move as well. With the Islamic State’s attempts to leverage the lives of two Japanese hostages, legislation to implement the reinterpretation is set to be submitted to the Diet.

Yet the reinterpretation has faced some resistance at home and abroad. Chinese critics, in particular, have expressed concern that Japanese militarism could reemerge, though they neglect to mention that it is China’s military buildup that prompted Japan’s government to reassess its national defense policy.

In fact, the reinterpretation amounts to little more than a tweak: Japanese forces can now shield an American warship defending Japan, but they remain prohibited from initiating offensive attacks or participating in multilateral military operations. Given that the United Nations charter recognizes individual and collective self-defense as an “inherent right” of sovereign countries, the change should be uncontroversial.

But significant obstacles continue to block wider constitutional reform. Amendments require a two-thirds majority in both chambers of the Diet, and a majority in a popular referendum, making Japan’s constitution one of the world’s most difficult to revise. To facilitate his ambitions, Abe hopes to scale down the requirement to simple majorities in both chambers or eliminate the need for a public referendum.

Given popular resistance to change, Abe’s task will not be easy. Whereas citizens of most democracies regard their constitutions as works in progress – India, for example, has amended its constitution 99 times since 1950 – the Japanese largely treat their constitution as sacrosanct. As a result, rather than ensuring that their constitution reflects social, technological, economic, and even ideological developments, they zealously uphold its precise provisions, like religious fundamentalists defending the literal truth of scripture.

Moreover, pacifism is deeply ingrained in the Japanese psyche, even among young people, largely owing to the painful legacy of Japan’s prewar militarism. Indeed, a poll conducted by the World Values Survey last year revealed that only 15.3% of Japanese – compared with 74.2% of Chinese and 57.7% of Americans – would be prepared to defend their country, the lowest rate in the world. Just 9.5% of Japanese under the age of 30 said that they would be willing to fight.

Given such opposition, an actual revision of Article 9, rather than just a reinterpretation, does not seem feasible, especially while the avowedly pacifist Komeito party remains part of the ruling coalition. Even if Abe manages to relax the amendment requirements – no easy feat, given the likelihood that a popular referendum would reveal weak public support – he will probably have to leave the change to his successor.

But one factor could bolster Abe’s cause considerably. Explicit US support for Japanese constitutional reform might not only blunt Chinese criticism, but could also reassure many Japanese that updating Article 9 would not amount to rejecting the postwar order that the Americans helped to establish in Japan.

Such a move would also serve US security interests. A more confident and secure Japan would be better able to block China from gaining ascendancy in the western Pacific, thereby advancing the central US policy objective of ensuring a stable balance of power in Asia. No other country in the region could act as a credible counterweight to China.

Today’s Japan – a liberal democracy that has not fired a single shot against an outside party in nearly seven decades, and that has made major contributions to global development during this period – is very different from the Japan of 1947. Its constitution should reflect that.

© Project Syndicate, 2015.

Don’t believe the hype on U.S.-India civil nuclear deal

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Brahma Chellaney, Nikkie Asian Review

43675476.siA “breakthrough understanding” on the stalled civil nuclear deal between India and the U.S. took center-stage in a recent summit between U.S. President Barack Obama and Indian Prime Minister Narendra Modi in New Delhi. It stands out as the only substantive advance in a presidential visit heavy on pageantry and symbolism. But the publicity surrounding the supposed breakthrough was overblown, and the celebrations can only be described as premature.

The deal was portrayed internationally as opening the path for U.S. companies to bag multibillion-dollar reactor contracts, and for Japan and Australia to sign similar deals with India, which plans to ramp up its capacity to generate nuclear power by importing two dozen commercial reactors within the next decade. Currently, nuclear power represents barely 2% of India’s total installed power capacity.

Since it was unveiled in 2005, the U.S.-India nuclear deal — with its many twists and turns — has hogged the limelight at virtually every bilateral summit between leaders of the two countries. In its arduous journey toward implementation, the deal has spawned multiple subsidiary agreements, each of which has been hailed as an important breakthrough.

The latest understanding centers on two issues — nuclear accident liability, and administrative arrangements to govern the bilateral nuclear cooperation agreement required under Section 123 of the U.S. Atomic Energy Act. Obama announced that “we achieved a breakthrough understanding on [the] two issues that were holding up our ability to advance our civil nuclear cooperation.” However, there is still little prospect of early commercialization of the deal.

The newest “breakthrough” is short on specifics and raises troubling questions. It contrives a model that shifts the liability risks for nuclear accidents to Indian taxpayers, thus undermining India’s domestic law, the 2011 Civil Liability for Nuclear Damage Act, which holds suppliers, designers and builders liable in case of an accident. The breakthrough compromise has been designed to circumvent the central principle enshrined in that law — the right to bring civil legal action for damages against suppliers in the event of a nuclear accident caused by defective equipment, components or designs.

Remembering Fukushima

Consider Japan’s 2011 Fukushima disaster. General Electric of the U.S. built or designed the three Fukushima reactors that suffered core meltdowns, yet GE escaped penalties or legal action after the disaster, despite a fundamental design deficiency in the reactors, because Japan’s law indemnifies suppliers, making plant operators exclusively and fully liable. It was to avert such a situation that India’s law armed the Nuclear Power Corporation of India, the state-run plant operator, with the right of recourse to suppliers. India’s sensitivity on this point reflects its bitter experience over a 1984 gas leak from a chemical plant in Bhopal that killed as many as 3,000 people shortly after the accident. The plant was owned by Union Carbide of the U.S.

Supplier liability is a well-established legal concept, applied in many business sectors around the world to deter suppliers from taking undue risks. But the 2011 Act makes India an outlier in terms of current international standards on civil nuclear liability. The global nuclear power industry is controlled by a powerful group of a few state-controlled or state-supported companies that push an opposite norm — that plant operators assume absolute liability so that suppliers face no downside risks.

Too many conventions

Globally, the liability issue has been muddied by a multiplicity of international conventions, protocols, and supplementary conventions introduced since 1960. A majority of the 34 states with civil nuclear power generation capacity have signed one or both of two main conventions, or revised versions of the two. Some of the states that did not sign these conventions, including heavyweights such as the U.S., Canada and Japan, have signed the 1997 Convention on Supplementary Compensation for Nuclear Damage, seen by some as a step toward a unified global liability treaty.

This network of overlapping international arrangements makes liability a complex issue. Some important nuclear power states have not signed any international agreements, including China, South Korea, Taiwan, Pakistan and Iran. India has signed but not ratified the CSC. But the conventions have some key points in common, including assigning exclusive liability to plant operators, mandatory insurance coverage of the operators’ liability, and exclusive jurisdiction of the courts in the country where the accident occurs. India’s domestic law follows this template, but also gives the operator the right to recover damages from suppliers.

     The paradox is that U.S. domestic law allows suppliers, designers and builders of nuclear plants to be held legally liable in the event of accidents, although the 1957 Price-Anderson Act restricts economic liability to operators. Yet the U.S. has sought to shield its exporting firms from claims made by foreign customers by insisting that India and other importing countries accept operators’ strict liability and limit all claims to the jurisdiction of their own courts.

Under the compromise worked out by Obama and Modi, U.S. concerns about India’s legal approach are to be addressed through a legal contrivance called a “memorandum of law” — essentially an executive order — and a $245 million “India Nuclear Insurance Pool,” which is to be set up jointly by India’s state-run insurance companies and its federal government. A number of countries have nuclear insurance pools, but most do not have a legal framework that makes suppliers potentially liable for accidents, as India’s 2011 Act does. For this reason, the memorandum calls for an insurance pool that would address both operator and supplier liability, preventing damages claims against foreign supplier companies.

This arrangement, although claimed by New Delhi to be “squarely within our [Indian] law,” constitutes “a risk-transfer mechanism,” as the Indian foreign ministry has admitted. Under the arrangement, the Indian government is effectively scrapping the right of recourse to foreign suppliers provided by Indian domestic law and transferring the liability risk to Indian taxpayers, offset partly by the modest insurance pool. U.S. officials say the two governments are in agreement over India’s memorandum plan, which they view as a creative solution. But how can a “memorandum of law,” with no legislative imprimatur, reinterpret a statute in a way that effectively guts it?

First, the contrivance being fashioned as part of the understanding between the two leaders threatens to open a legal can of worms. U.S. officials are advising American companies to do their own risk assessments, even though Obama’s deputy national security adviser, Ben Rhodes, affirmed in New Delhi that “in our judgment, the Indians have moved sufficiently on these issues to give us an assurance that the issues are resolved and that there is a path open to implementation and investment here.” No details have been announced by either government on the resolution of another sticking point: a U.S. demand that India accept nuclear-materials tracking and accounting arrangements that go beyond the safeguards system approved by the International Atomic Energy Agency. The same obstacle has held up conclusion of a Japan-India nuclear deal. It is now up to U.S. companies to decide whether to do nuclear business in India.

Second, at a time of skyrocketing reactor construction costs, the crash of oil and gas prices has made nuclear power’s economics more unfavorable. Nuclear power is already the world’s most subsidy-fattened energy industry. Since the 1980s, average international costs for nuclear power have jumped from $1,000 per installed kilowatt to nearly $8,000. Few new reactors are under construction in the West, and the International Energy Agency has warned that “uncertainties continue to cloud the future for nuclear.”

Modi has emphasized that reactor imports will be governed by “technical and commercial viability.” The deal’s commercialization, however, will be dictated not by the market but by the extent to which the Indian government is willing to fork out subsidies to support high-priced electricity generated from imported reactors.

India is in negotiations with four foreign supplier companies — Areva of France, Russia’s Atomstroyexport, Westinghouse, owned by Toshiba of Japan, and GE-Hitachi, jointly owned by GE and Hitachi of Japan. The latter two are both based in the U.S. Under the plans, the companies will each be confined to a single site, on which they will build multiple reactors that will be operated by the state-owned nuclear power company, thus freeing the foreign vendors from the problem of producing electricity at marketable rates. Currently, negotiations are stuck over the price of power. India has offered Areva, with which negotiations are most advanced, a price of 11 U.S. cents per kilowatt hour — more than twice the average price of electricity from indigenously built reactors. The state-controlled French company is holding out for a much higher price.

Not in our backyards

20150104_india_nuclear.jpg_middle_320

The U.S.-built Tarapur atomic power station, located near Mumbai, is India’s oldest nuclear power plant.

Finally, grassroots opposition is growing to new nuclear power plants in India, especially against the Fukushima-type multi-reactor parks earmarked for foreign vendors. Building six to eight giant reactors in a single complex raises additional safety issues, as highlighted by the triple Fukushima meltdown. Local communities want nuclear power plants to be located in someone else’s backyard.

Worse still, India plans to import — as Japan did at Fukushima — prototype reactors that are not in operation anywhere in the world, including GE-Hitachi’s Economic Simplified Boiling Water Reactor, which only recently received U.S. regulatory approval, Westinghouse’s AP1000, criticized in the U.S. for supposed design failings, and Areva’s Evolutionary Pressurized Reactor, which is under construction in France and Finland but has suffered major cost overruns and delays. Prototypes usually face major teething troubles and carry greater long-term risks.

     If a serious accident were to occur, India would be saddled with staggering long-term costs. Japan’s Fukushima disaster bill has been conservatively estimated by an Osaka City University study at $105 billion, or 429 times higher than the Indian insurance pool’s capital. Japan is now establishing a state-backed compensation institution to be funded with government bonds totaling 5 trillion yen ($42 billion) and by utilities. This fund surpasses the $13.6 billion cover currently provided by the U.S. Price-Anderson Act, with another $10 billion pledged by the U.S. Department of Energy.

The Price-Anderson Act, which provides subsidies to the U.S. nuclear power industry by underwriting insurance costs, has been mocked by independent U.S. groups as “Half-Price Anderson.” India’s contrivance can be labeled “Free-Ride Anderson.” Yet it is unlikely to resolve all the tricky issues bedeviling the nuclear deal’s commercialization.

BrahmaChellaney-icon_small_150Brahma Chellaney is a professor of strategic studies at the independent Center for Policy Research in New Delhi and author of “Water: Asia’s New Battleground,” winner of the 2012 Bernard Schwartz Award.

(c) Nikkie Asian Review, 2015.

East Asia’s Historical Shackles

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A column internationally syndicated by Project Syndicate.

flagsTOKYO – Diplomatic relationships in East Asia have long been held hostage by history. But the region’s “history problem” has been intensifying lately, with growing nationalism among major actors like China, Japan, and South Korea fueling disputes over everything from territory and natural resources to war memorials and textbooks. Can East Asian countries overcome their legacy of conflict to forge a common future that benefits all?

Consider the relationship between America’s closest East Asian allies, Japan and South Korea. Though historical disagreements have long hampered bilateral ties, the increasingly nationalistic stance of Japanese Prime Minister Shinzo Abe and South Korean President Park Geun-hye has aggravated festering tensions. If they fail to work together to stem the revival of bitter historical disputes, their relationship will remain frozen, playing into China’s hands.

And nobody plays the history card with quite as much relish as China, where President Xi Jinping is also relying on nationalism to legitimize his rule. Last year, China introduced two new national memorial days to commemorate China’s long battle against Japanese aggression in World War II: “War against Japanese Aggression Victory Day” on September 3 and “Nanjing Massacre Day” on December 13. What would happen if countries like Vietnam and India dedicated days to remembering China’s aggression toward them since 1949?

By reinforcing negative stereotypes of rival countries, such squabbles over history and remembrance sow fragmentation and instability, and have certainly fueled the region’s recent territorial disputes. Indeed, the politicization of history remains the principal obstacle to reconciliation in East Asia. Repeated attempts to rewrite history – sometimes literally, through textbook revisions – along nationalist lines make it nearly impossible to establish regional institutions.

This should not be the case. Japan and South Korea, for example, are vibrant democracies and export-oriented economic powerhouses, with traditionally close cultural ties and many shared values. In other words, they are ideal candidates for collaboration.

US President Barack Obama recognizes this potential, and has promoted increased strategic cooperation between South Korea and Japan in order to underpin a stronger trilateral security alliance with the US that can balance a rising China. But Japan and South Korea refuse to let go of history.

To be sure, there is some truth to South Korea’s accusation that Japan is denying some of its past behavior. But it is also true that Park – who has refused to meet formally with Abe until he addresses lingering issues over Japan’s annexation of Korea – has used history to pander to domestic nationalist sentiment. Indeed, adopting a hardline stance has enabled her to whitewash some inconvenient family history: Her father, the dictator Park Chung-hee, collaborated with the Japanese military while Korea was under colonial rule.

Abe, too, has stoked tensions, particularly by visiting Tokyo’s Yasukuni Shrine – a controversial memorial that honors, among others, Class A war criminals from World War II. Though Abe visited the shrine only once – in December 2013 – he felt compelled to do so in response to China’s unilateral declaration of an air-defense identification zone, covering territories that it claims but does not control.

Of course, the divergences between Japanese and South Korean historical narratives go back further than WWII. More than a century ago, the Korean activist Ahn Jung-geun assassinated Japan’s first prime minister, Hirobumi Ito, at the railway station in the Chinese city of Harbin, cementing Ahn’s status as a hero in Korea and a terrorist in Japan. Ito’s image can be seen on Japan’s 1,000-yen note; Ahn has appeared on a 200-won postage stamp in South Korea.

A visitor looking at exhibits at the Chinese memorial to the Korean assassin who killed Japan's first PM. © AFP

A visitor looking at exhibits at the Chinese memorial to the Korean assassin who killed Japan’s first PM. © AFP

Last year, Park asked Xi to honor Ahn. Xi seized the opportunity to drive a wedge between America’s two main Asian allies, and built a memorial to Ahn. Japan responded by blasting China for glorifying a terrorist and propagating a “one-sided” view of history – a move that, Japan asserted, was “not conducive to building peace and stability.”

Such conflicts have a clear catalyst: Asia’s rising prosperity. As their economies have expanded, Asian countries have gained the confidence to construct and exalt a new past, in which they either downplay their own aggressions or highlight their steadfastness in the face of brutal victimization.

All countries’ legitimizing narratives blend historical fact and myth. But, in some cases, historical legacies can gain excessive influence, overwhelming leaders’ capacity to make rational policy choices. That explains why Park has sought closer ties with China, even though South Korea’s natural regional partner is democratic Japan. One source of hope stems from Abe’s landslide victory in the recent snap general election, which gives him the political capital to reach out to Park with a grand bargain: If Japan expresses remorse more clearly for its militaristic past, South Korea will agree to leave historical grievances out of official policy.

Japan and South Korea cannot change the past. But they can strive to shape a more cooperative future. As a Russian proverb succinctly puts it, “Forget the past and lose an eye; dwell on the past and lose both eyes.”

© Project Syndicate, 2015.

Reshaping India’s diplomacy

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BY BRAHMA CHELLANEY

January 18, 2015, The Japan Times

Building closer ties with important democracies has become the leitmotif of his foreign policy. For example, his much-photographed bear hug with Abe in Kyoto has come to symbolize the dawn of an alliance between the world’s largest democracy and Asia’s oldest (and richest) democracy. Likewise, Modi is enhancing defense and economic cooperation with Israel, with India ordering more Israeli arms in the past six months than in the previous three years.

When Modi won the election, his critics claimed the nationalist would pursue a doctrinaire approach in office. However, one trademark of Modi’s diplomacy is that it is shorn of ideology, with pragmatism being the hallmark.

Nothing better illustrates his pragmatism than the priority he has accorded to restoring momentum to India’s relationship with America.

There was concern in Washington that Modi might nurse a grudge against the United States and keep American officials at arm’s length. After all, the U.S. continued to deny Modi a visa over his alleged involvement in the 2002 anti-Muslim riots in his home state of Gujarat even after he had been cleared of any wrongdoing by an inquiry appointed by India’s Supreme Court. Yet, when he won the election, Obama was quick to telephone him and invite him to the White House — an invitation Modi gladly accepted, given the critical importance of America to India.

Modi’s White House visit last September helped him to establish a personal rapport with Obama. Obama’s impending India visit represents both a thank you to Modi for rising above personal umbrage and an effort to lift the U.S.-India relationship to a higher level of engagement through the major new opportunities being opened up for American businesses by Modi’s commitment to pro-market economic policies and defense modernization.

The U.S. already conducts more military exercises with India than with any other country. And in recent years, it has quietly overtaken Russia as the largest arms supplier to India.

Another example of Modi’s pragmatism is his effort to befriend China. He has invited Chinese investment in his plan to modernize India’s infrastructure, especially railroads, power stations and industrial parks. China’s foreign direct investment in India, however, remains trifling, with Chinese companies preferring to import primary commodities from India while exporting an avalanche of finished products.

China represents Modi’s diplomatic gamble, as was highlighted when Xi’s visit to India four months ago coincided with Chinese military incursions into India’s Ladakh region and a Chinese submarine’s visit to Sri Lanka. The submarine visit underscored an emerging new threat to Indian security from the Indian Ocean, a region where China has been building ports and other infrastructure projects to extend its strategic clout and build naval presence.

Another regional adversary, Pakistan, poses a different set of challenges for Modi, given the Pakistani military’s use of terrorist proxies. More than six years after the horrific Mumbai terrorist attacks, Pakistan has yet to begin the trial of the seven Pakistani perpetrators in its custody. Adding insult to injury, Pakistani authorities recently helped United Nations-designated terrorist Hafiz Saeed — the architect of the Mumbai attacks — to stage a large public rally in Lahore city, including by running special trains to ferry in participants.

Modi’s Pakistan policy blends a firm response to border provocations with friendly signals. For example, he invited his Pakistani counterpart, Nawaz Sharif, to his inauguration and asked Indian schools to honor the victims of the recent Peshawar attack in Pakistan with a two-minute silence.

At home, Modi has shaken up the diffident foreign-policy establishment with his proactive approach and readiness to break with conventional methods and shibboleths. By taking bold new tacks, Modi is charting a course to boost India’s strategic influence both in its neighborhood and the wider world.

Indeed, Modi has put his stamp on foreign policy faster than any predecessor, other than the country’s first post-independence prime minister, Jawaharlal Nehru. Yet Modi appears to have no intent of enunciating a Modi doctrine in foreign policy. He wants his actions to define his policy trademarks.

His actions have already started speaking for themselves — from his moves to engineer stronger partnerships with Japan and Israel (countries critical to Indian interests but which also courted him even as the U.S. targeted him) to his mortars-for-bullet response to Pakistan’s ceasefire violations. His firm stand at the World Trade Organization on food stockpiling, central to India’s food security, demonstrated that he will stand up even to a powerful, rich nations’ cabal.

More significantly, Modi’s policy appears geared to move India from its long-held nonalignment to a contemporary, globalized practicality. This means from being nonaligned, India is likely to become multialigned, even as it tilts more toward the U.S. and other democracies in Asia and Europe. Yet, importantly, India will continue to chart its own independent course. For example, unlike Japan, it has refused to join American-led financial sanctions against Russia.

After a long era of ad hoc and reactive Indian diplomacy, the new clarity and vision Modi represents is widely seen as a welcome change for India.

Brahma Chellaney is a geostrategist and the author, most recently, of “Water, Peace, and War” (Rowman & Littlefield).

Pakistan’s New Leaf?

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Brahma Chellaney

A column internationally syndicated by Project Syndicate.

As U.S. Secretary of State, Hillary Clinton bluntly told Pakistan in 2011 that “you can’t keep snakes in your backyard and expect them only to bite your neighbors.” But her warning (“eventually those snakes are going to turn on” their keeper), like those of other American officials over the years, including presidents and CIA chiefs, went unheeded.

17pakistan-hp-slide-03-articleLarge-v2The snake-keeper’s deepening troubles were exemplified by the recent massacre of 132 schoolchildren in Peshawar by militants no longer under the control of Pakistan’s generals. Such horror is the direct result of the systematic manner in which the Pakistani military establishment has reared jihadist militants since the 1980s as an instrument of state policy against India and Afghanistan. By continuing to nurture terrorist proxies, the Pakistani military has enabled other militants to become entrenched in the country, making the culture of jihad pervasive.

The Peshawar massacre was not the first time that the world’s leading state sponsor of terrorism became a terror victim. But the attack has underscored how the contradiction between battling one set of terror groups while shielding others for cross-border undertakings has hobbled the Pakistani state.

As a result, the question many are asking is whether, in the wake of the Peshawar killings, the Pakistani military, including its rogue Inter-Services Intelligence (ISI) agency, will be willing to break its ties with militant groups and dismantle the state-run terrorist infrastructure. Unfortunately, developments in recent months, including in the aftermath of the Peshawar attack, offer little hope.

On the contrary, with the military back in de facto control, the civilian government led by Prime Minister Nawaz Sharif is in no position to shape developments. And, despite the increasing blowback from state-aided militancy, the generals remain too wedded to sponsoring terrorist groups that are under United Nations sanctions – including Lashkar-e-Tayyiba (LeT) and the Haqqani network – to reverse course.

Reliance on jihadist terror has become part of the generals’ DNA. Who can forget their repeated denial that they knew the whereabouts of Osama bin Laden before he was killed by US naval commandos in a 2011 raid on his safe house in the Pakistani garrison city of Abbottabad? Recently, in an apparent slip, a senior civilian official – Sharif’s national security adviser, Sartaj Aziz – said that Pakistan should do nothing to stop militants who do not intend to harm Pakistan.

The nexus among military officers, jihadists, and hardline nationalists has created a nuclear-armed “Terroristan” that will most likely continue to threaten regional and global security. State-reared terror groups and their splinter cells, some now operating autonomously, have morphed into a hydra. Indeed, as the country’s civilian political institutions corrode, its nuclear arsenal, ominously, is becoming increasingly unsafe.

Pakistan is already a quasi-failed state. Its anti-India identity is no longer sufficient to stem its mounting contradictions, which are most apparent in the two incarnations of the Taliban: the Afghan Taliban, which is the Pakistani military’s surrogate, and the Pakistani Taliban – formally known as Tehreek-e-Taliban Pakistan (TTP) – which is the military’s nemesis. Pakistan also provides sanctuary to the Afghan Taliban’s chief, Mullah Mohammad Omar (and also harbors a well-known international fugitive, the Indian organized crime boss Dawood Ibrahim).

Meanwhile, Hafiz Saeed, the founder of the ISI’s largest surrogate terror organization, LeT, remains the generals’ darling, leading a public life that mocks America’s $10 million bounty on his head and the UN’s inclusion of him on a terrorist list. Earlier this month, Pakistani authorities aided a large public rally by Saeed in Lahore, including by running special trains to ferry in participants, so that the architect of the November 2008 Mumbai terrorist attack (among many others) could project himself as some sort of messiah of the Pakistani people.

Yet none of that stopped Pakistan’s Chief of Army Staff, Raheel Sharif, and ISI Director-General Rizwan Akhter from rushing to Kabul after the Peshawar attack to demand that President Ashraf Ghani and the U.S.-led military coalition extradite TTP chief Mullah Fazlullah or allow Pakistani forces to go in after him. In other words, they seek the help of Afghanistan and the U.S. to fight the Pakistani Taliban while unflinchingly aiding the Afghan Taliban, which has been killing Afghan and NATO troops.

Such is the generals’ Janus-faced approach to terrorism that six years after the Mumbai attacks, Pakistan has yet to try the seven Pakistani perpetrators in its custody. Indeed, under the cover of indignation over the Peshawar attack, the leading suspect in the case – UN-designated terrorist Zaki-ur-Rehman Lakhvi, who served as LeT’s operations chief – secured bail. International outrage soon forced Pakistan to place him in preventive detention for up to three months.

Those who believe that the Peshawar massacre might serve as a wakeup call to the Pakistani military should ask why the generals have ignored hundreds of earlier wakeup calls. Despite the blowback imperiling Pakistan’s future, the generals show no sign that they have tired of running with the hare and hunting with the hounds.

The international community should stop placing its hope in some abrupt change of heart on the generals’ part. Creating a moderate Pakistan at peace with itself can only be a long-term project, because it hinges on empowering a feeble civil society and, ultimately, reining in the military’s role in politics. As long as the military, intelligence, and nuclear establishments remain unaccountable to the civilian government, Pakistan, the region, and the world will continue to be at risk from the jihadist snake pit that the country has become.

© Project Syndicate, 2014.