Author Archives: Chellaney

Unknown's avatar

About Chellaney

Professor, strategic thinker, author and commentator

China divides Asia

Posted on by
Reply

The center of Asia’s divide

By BRAHMA CHELLANEY

The Japan Times, October 1, 2010

Japan may have created the impression of having buckled under China’s pressure by releasing the Chinese fishing trawler captain. But the Japanese action helps move the spotlight back to China, whose rapid accumulation of power has emboldened it to aggressively assert territorial and maritime claims against its neighbors, from Japan to India.

Having earlier preached the gospel of its "peaceful rise," China is no longer shy about showcasing its military capabilities and asserting itself on multiple fronts. While the Chinese leadership may gloat after forcing Tokyo to climb down and release the captain, the episode — far from shifting the Asian balance of power in Beijing’s favor — has only shown that China is at the center of Asia’s political divides.

China’s new stridency in its territorial and maritime disputes with its neighbors has helped highlight Asia’s central challenge to come to terms with existing boundaries by getting rid of the baggage of history that weighs down a number of interstate relationships. Even as Asia is becoming more interdependent economically, it is becoming more divided politically.

While the bloody wars in the first half of the 20th century have made war unthinkable today in Europe, wars in Asia during the second half of the 20th century did not resolve matters and have only accentuated bitter rivalries. A number of interstate wars have been fought in Asia since 1950, the year both the Korean War and the annexation of Tibet started. Those wars, far from settling or ending disputes, have only kept disputes lingering.

China, significantly, has been involved in the largest number of military conflicts. A recent Pentagon report has cited examples of how China carried out military preemption in 1950, 1962, 1969 and 1979 in the name of strategic defense. The report states: "The history of modern Chinese warfare provides numerous case studies in which China’s leaders have claimed military preemption as a strategically defensive act.

For example, China refers to its intervention in the Korean War (1950-1953) as the "War to Resist the United States and Aid Korea." Similarly, authoritative texts refer to border conflicts against India (1962), the Soviet Union (1969) and Vietnam (1979) as "self-defense counterattacks." The seizure of Paracel Islands from Vietnam in 1974 by Chinese forces was another example of offense as defense.

All these cases of preemption occurred when China was weak, poor and internally torn. So today, China’s growing power naturally raises legitimate concerns. A stronger, more prosperous China is already beginning to pursue a more muscular foreign policy vis-a-vis its neighbors, as underscored by several developments this year alone — from its inclusion of the South China Sea in its "core" national interests, an action that makes its claims to the disputed Spratly Islands nonnegotiable, to its reference to the Yellow Sea as a sort of exclusive Chinese military-operations zone where the U.S. and South Korea should discontinue holding joint naval exercises.

China also has become more insistent in pressing its territorial claims to the Japanese-controlled Senkaku Islands, with Chinese warships making more frequent forays into Japanese waters.

As if to signal that it is acquiring the military power to enforce its claims, China has since April conducted large-scale naval exercises, first near Japan’s Ryukyu Islands chain — with a Chinese helicopter buzzing a Japanese destroyer — then in the East China Sea and, most recently, in the Yellow Sea.

In Tibet, the official PLA (People’s Liberation Army) Daily has reported several new significant military developments in recent months, including the first-ever major parachute exercise to demonstrate a capability to rapidly insert troops on the world’s highest plateau and an exercise involving "third generation" fighter-jets carrying live ammunition.

In addition, the railroad to Tibet, the world’s highest elevated railway, has now started being used to supply "combat readiness materials for the air force" there. These military developments have to be seen in the context of China’s resurrection since 2006 of its long-dormant claim to India’s northeastern Arunachal Pradesh state and its recent attempts to question Indian sovereignty over the state of Jammu and Kashmir, one-fifth of which it occupies.

Against that background, China’s increasingly assertive territorial and maritime claims threaten Asian peace and stability. In fact, the largest real estate China covets is not in the South or East China Seas but in India: Arunachal Pradesh is almost three times larger than Taiwan. Respect for boundaries is a prerequisite to peace and stability on any continent. Europe has built its peace on that principle, with a number of European states learning to live with boundaries they do not like.

Efforts to redraw territorial and maritime frontiers are an invitation to endemic conflicts in Asia. Through its overt refusal to accept the territorial status quo, Beijing only highlights the futility of political negotiations.

After all, a major redrawing of frontiers has never happened at the negotiating table in world history. Such redrawing can only be achieved on the battlefield, as Beijing has done in the past.

Today, whether it is Arunachal Pradesh or Taiwan or the Senkaku Islands, or even the Spratlys, China is dangling the threat to use force to assert its claims. In doing so, China has helped reinforce the specter of a China threat. By picking territorial fights with its neighbors, China also is threatening Asia’s continued economic renaissance. More significantly, China is showing that it is not a credible candidate to lead Asia.

It is important for other Asian states and the rest of the international community to convey a clear message to Beijing: After six long decades, China’s redrawing of frontiers must now come to an end.

Brahma Chellaney is the author, most recently, of "Asian Juggernaut: The Rise of China, India and Japan" (HarperCollins, 2010).
The Japan Times: Friday, Oct. 1, 2010
(C) All rights reserved

China bolsters U.S. role in Asia

Posted on by
Reply

CHELLANEY: China undercuts its own goals

Aggressive posture drives smaller powers toward the U.S.

By Brahma Chellaney

–

The Washington Times

 
 

September 24, 2010

 

China’s aggressive military moves in recent months have many countries worried about a Sino-centric Asian security future. But such a scenario is unlikely to unfold because the more China flexes its muscles, the more several of its neighbors turn to the United States for help.

 

China has not disguised its desire for a unipolar Asia but multipolar world. But instead of a Sino-centric Asia, China is unwittingly aiding an opposite scenario: America remaining the principal security anchor for Asia. Through its increasing assertiveness, China is reinforcing America’s role in Asia as the implicit guarantor of security and stability.

 

There are two other possible scenarios that can unfold even with a continued central security role for the United States in Asia. One prospect is the emergence of a constellation of Asian states with common interests working together to ensure power equilibrium in Asia. The other possibility is of an Asia characterized by several resurgent powers, including Japan, India, Vietnam, Indonesia and a reunified Korea.

 

Of the four scenarios, the least likely is the first one — a Sino-centric Asia. China’s neighbors increasingly are uneasy about its growing power and assertiveness. China’s actions, in fact, hardly make it a credible candidate for leading Asia.

 

Raw power cannot buy leadership. After all, leadership can come not from overbearing power, but from other states’ consent or tacit acceptance. In any event, China’s power may be vast and rapidly growing, yet it lacks the capability to militarily rout or compel any rival, let alone enforce its writ on Asia.

 

As China seeks to translate its economic clout into major geopolitical advantage in Asia, a nation that once boasted of "having friends everywhere" finds that its accumulating power might inspire awe, but its actions are spurring new concerns and fears.

 

Leadership rests not just on material power, but also on normative power. It demands the power of ideas that can galvanize others. Such power also serves as the moral veneer to the assertiveness often involved in the pursuit of any particular cause or interest.

 

The Cold War, for example, was won by the United States and its allies not so much by military means as by spreading the ideas of political freedom and market capitalism to other regions that undercut communism’s global appeal and made it incapable of meeting the widespread yearning for a better and more open life.

 

China has shown itself good at assertive promotion of national interests and in playing classical balance-of-power geopolitics. But to assume the mantle of leadership in Asia by displacing the United States, it must do more than just pursue its own interests or contain potential peer rivals. More fundamentally, what does China represent in terms of values and ideas?

 

With its defense spending having grown almost twice as fast as its gross domestic product (GDP), China is now beginning to take the gloves off, confident that it has acquired the necessary muscle.

 

This has been exemplified by several developments — from China’s inclusion of the South China Sea in its "core" national interests to its efforts to present the Yellow Sea as its virtually exclusive military-operation zone. Add to the picture the large-scale Chinese naval exercises in recent months, first off Japan’s Ryukyu Islands, then in the South China Sea and most recently in the Yellow Sea.

 

China also has increasingly questioned India’s sovereignty over Arunachal Pradesh, the northeastern Indian state that Beijing calls "Southern Tibet" and claims largely as its own. Indian defense officials have reported a rising number of Chinese military incursions across the 2,521-mile Himalayan border.

 

The official PLA Daily has reported several significant military developments in Tibet in recent months, including the first-ever major parachute exercise to demonstrate China’s capability to rapidly insert troops on the world’s highest and largest plateau, Tibet. The new railroad to Tibet is now being used to supply "combat-readiness materials" to the Chinese air force stationed along the Himalayan belt.

 

China’s actions indeed are proving a strategic boon for Washington in strengthening and expanding U.S. security arrangements in Asia. In terms of power-projection force capabilities or the range of military bases and security allies in Asia, no power or combination of powers is likely to match the United States in the next quarter of a century.

 

While America’s continued central role in Asia is safe, the long-term viability of its security arrangements boils down to one word: Credibility. The credibility of America’s security assurances to allies and partners, and its readiness to stand by them when it comes to the crunch, will determine the future strength and size of its security-alliance system in Asia.

 

A combination of the second and third scenarios seems the most plausible prospect. A constellation of Asian states linked by strategic cooperation and with close ties to the United States has become critical to help institute power stability in Asia. But such a security constellation demands forward-looking policies in Washington, Tokyo, New Delhi, Seoul, Hanoi, Jakarta, Canberra and elsewhere.

 

Brahma Chellaney is the author of "Asian Juggernaut: The Rise of China, India and Japan" (HarperCollins, 2010).

© Copyright 2010 The Washington Times, LLC.

China hardly a credible candidate to lead Asia

Posted on by
Reply

The Japan Times, September 22, 2010

A Sino-centric Asia unlikely

How Asia’s geopolitical landscape will evolve over the next couple of decades is not easy to foresee. But it is apparent that an increasingly assertive China is unwittingly reinforcing America’s role in Asia as the implicit guarantor of security and stability.

There are at least four possible Asian security scenarios. The first is the rise of a Sino-centric Asia, as desired by Beijing. China seeks a multipolar world but a unipolar Asia. By contrast, the United States desires a unipolar world but a multipolar Asia. A second scenario is of the U.S. remaining Asia’s principal security anchor. A third possibility is the emergence of a constellation of Asian states with common interests working together to ensure both power equilibrium and an Asia that is not unipolar. A fourth scenario is of an Asia characterized by several resurgent powers, including Japan, India, Vietnam, Indonesia and a reunified Korea.

Of the four scenarios, the least likely is the first one. China’s neighbors increasingly are uneasy about its growing power and assertiveness. While Beijing aspires to shape a Sino-centric Asia, its actions hardly make it a credible candidate for Asian leadership.

Brute power cannot buy leadership. After all, leadership can come not from untrammeled power, but from other states’ consent or tacit acceptance. If leadership could be built on brute force, schoolyard bullies would be class presidents.

In any event, China’s power may be vast and rapidly growing, yet it lacks the power of compulsion. In other words, China does not have the capability to militarily rout or compel any rival, let alone enforce its will on Asia.

As China seeks to translate its economic clout into major geopolitical advantage in Asia, a nation that once boasted of "having friends everywhere" finds that its accumulating power might inspire awe, but its actions are spurring new concerns and fears. Which states will accept China as Asia’s leader? Six decades of ruthless repression has failed to win China acceptance even in Tibet and Xinjiang, as the Tibetan and Uighur revolts of 2008 and 2009 attested.

Leadership involves much more than the possession of enormous economic and military power. It demands the power of ideas that can galvanize others. Such power also serves as the moral veneer to the assertiveness often involved in the pursuit of any particular cause.

The Cold War, for example, was won by the U.S. and its allies not so much by military means as by spreading the ideas of political freedom and market capitalism to other regions that, in the words of strategic thinker Stanley A. Weiss, "helped suck the lifeblood out of communism’s global appeal," making it incapable of meeting the widespread yearning for a better and more-open life.

China has shown itself good at assertive promotion of national interests and in playing classical balance-of-power geopolitics. But to assume the mantle of leadership in Asia by displacing the U.S., it must do more than just pursue its own interests or contain potential peer rivals. The overly assertive policies and actions of a next-door rising power make Asian states look to a distant protector. With its defense spending having grown almost twice as fast as its GDP, China is now beginning to take the gloves off, confident that it has acquired the necessary muscle.

This has been exemplified by several developments — from China’s inclusion of the South China Sea in its "core" national interests on a par with Taiwan and Tibet to its efforts to present the Yellow Sea as its virtually exclusive military-operation zone. Add to the picture large-scale naval exercises in recent months first off Japan’s Ryukyu Islands, then in the South China Sea and most recently in the Yellow Sea.

China also has increasingly questioned India’s sovereignty over Arunachal Pradesh, the northeastern Indian state that Beijing calls "Southern Tibet" and claims largely as its own. Indian defense officials have reported a rising number of Chinese military incursions across the 4,057-km Himalayan border.

Through its actions, China indeed has proven a diplomatic boon for Washington in strengthening and expanding U.S. security arrangements in Asia. South Korea has tightened its military alliance with the U.S., Japan has backing away from an effort to get the U.S. to move its marine air base out of Okinawa, and India, Vietnam, Indonesia and the Philippines, among others, have drawn closer to the U.S.

In terms of power-projection force capabilities or the range of military bases and security allies in Asia, no power or combination of powers is likely to match the U.S. in the next quarter of a century. While America’s continued central role in Asia is safe, the long-term viability of its security arrangements boils down to one word: Credibility. The credibility of America’s security assurances to allies and partners, and its readiness to stand by them when it comes to the crunch, will determine the strength and size of its security-alliance system in Asia in the years ahead. The third and fourth scenarios can unfold even if the U.S. remains the principal security anchor for Asia. A number of Asian countries have already started building mutually beneficial security cooperation on a bilateral basis, thereby laying the groundwork for a potential web of interlocking strategic partnerships.

A combination of the second and third scenarios is a plausible prospect, but it demands forward-looking policies in Washington, Tokyo, New Delhi, Seoul, Hanoi, Jakarta, Canberra and elsewhere. A constellation of Asian states linked by strategic cooperation and with close ties to the U.S. has become critical to help institute power stability in Asia. America’s continued role as a credible guarantor of Asian security, however, is a function not of its military strength but political will in Washington.

Brahma Chellaney is a professor of strategic studies at the Center for Policy Research.

Dealing with China’s increasing assertiveness

Posted on by
Reply

Let the facts speak for themselves

 

India can expect no respite from Chinese strategic pressure, but to adroitly manage its relationship with Beijing, it must let facts speak for themselves, says Brahma Chellaney

 

The Economic Times

September 17, 2010

 

The prime minister has underscored concerns over the perceptible hardening in China’s stance towards India. With its defence spending having grown almost twice as fast as its GDP, China is now beginning to take the gloves off, confident that it has acquired the necessary muscle. Rising power is emboldening Beijing to pursue a more muscular foreign policy not just against India, but also in the region extending from the South China Sea to Northeast Asia.

 

This has been exemplified by several developments — from China’s inclusion of the South China Sea in its “core” national interests, an action that makes its claims to the disputed islands non-negotiable, to its bellicose reaction to the South Korean-US joint anti-submarine exercises in the Sea of Japan. And just the way China has staked its claim to India’s Arunachal Pradesh, it has asserted its sovereignty over Japan’s Senkaku Islands, which were part of Japanese territory all along, even during the US occupation of Japan.

 

Little surprise China’s neighbours are increasingly uneasy about the implications of its growing power. Beijing aspires to shape a Sino-centric Asia, but its actions hardly make it a good candidate for Asian leadership. Leadership can come not from brute force, but from other states’ consent or tacit acceptance.

 

China’s belligerence, significantly, poses a greater threat for India than for any other Asian nation for several reasons. One, China is mounting both direct military intimidation (as underlined by the abnormally high level of continuing cross-border incursions) and proxy threats against India, including by shoring by its longstanding strategic nexus with Pakistan. Two, the largest real estate China covets is in India. Arunachal is almost three times bigger than Taiwan. Three, India has no formal security alliance with any other power and thus must depend on its own defence capabilities. And four, by seeking to badger India on multiple fronts, China is signalling that its real, long-term contest is more with India than with the US. The countries around India have become battlegrounds for China’s moves to encircle India. By assiduously courting these countries as proxies in its geopolitical competition with India, China has managed to make deep inroads into India’s strategic backyard — from Sri Lanka to Bangladesh, and Nepal to Burma.

 

Yet, the world knows more about China’s moves in the South China Sea and East Asia than its actions against India. At international conferences, even some experts on Asia are surprised when told simple facts, such as China’s increasingly assertive claim to an entire Indian state and its cross-border military incursions.

 

It is now a year since the Indian government put a lid even on the domestic press coverage of the Himalayan border situation. It was in September 2009 that senior government figures, from the PM down, spoke out against the strident Indian media reporting on Chinese border incursions. Since then, sources of information have dried up and newspapers and television networks have carried little news. It is not that the Chinese cross-border forays have ended or even abated. It is just that Indian media organizations have little information to report, even though the incidence of Chinese incursions remains high.

 

Suppressing news on the border situation serves no interests other China’s. It suits the Chinese agenda that the border situation is kept under wraps.

 

Even in the pre-1962 period, India had made the same mistake by playing down China’s aggressive moves along the border. In fact, there are important parallels between the situation pre-1962 and the situation now. Border talks have regressed, Chinese claims on Indian territories are becoming publicly assertive and Chinese cross-border incursions are common. In fact, commentaries in military journals suggest that some in China believe that a swift, 1962-style victory in a border war with India is attainable to cut to size a peer rival.

 

Take another example: It was in June that the Chinese notified their refusal to allow the Indian northern army command chief to visit Beijing. But the Indian side leaked it to the press only in late August. It is still unclear what has been India’s response to the snub. Beijing has said flatly that it “has received no word that India has stopped military exchanges between the two countries.”

 

In the midst of such developments, the Indian foreign minister gratuitously reiterated on August 21 that Tibet is “part of China.” That the Tibet issue remains at the core of the India-China divide is being underlined by Beijing itself by laying claim to additional Indian territories on the basis of alleged Tibetan ecclesial or tutelary links to them, not any professed Han connection. There is absolutely no need for India to periodically renew its commitment to a “one China” policy when China not only declines to reciprocally make a one-India pledge, but also mocks at India’s territorial integrity openly. Little thought has been given that by bringing India’s Tibet stance in complete alignment with China’s demand, New Delhi has undercut its own leverage while boosting China’s.

 

Without contributing to the rising tensions with China, India has to gently allow facts to speak for themselves — whether on the border situation, or Tibet’s centrality, or China’s overt refusal to accept the territorial status quo. Facts indeed are an anathema even to schoolyard bullies. By not hiding its intent to further redraw the frontiers, Beijing only highlights the futility of political negotiations. After all, a major redrawing of frontiers has never happened at the negotiating table in world history.

 

India should learn how Vietnam has managed to turn the diplomatic tables on China by not shying away from spotlighting the latter’s aggressive designs. In the process, China stood isolated at the last ASEAN Regional Forum meeting.

 

A stable equation with China is more likely to be realized if India puts premium on leveraged diplomacy and avoids a trans-Himalayan military imbalance. More broadly, China’s trajectory will depend on how its neighbours and distant countries like the US manage its growing power. Such management — independently and in partnership — will determine if Chinese power does not slide into arrogance.

 

Brahma Chellaney is the author of Asian Juggernaut (HarperCollins USA, 2010).

Politics lags economics in Asia

Posted on by
Reply

Economics isn’t everything
Improved geopolitics should have been as much of a priority as greater economic interdependence.
By Brahma Chellaney, JoongAng Daily, September 06, 2010
Brahma Chellaney

The dissimilarities between Asia and Europe are striking. Consider the following:

– While Europe has achieved equilibrium between and among its main powers, Asia is far from evolving any sort of equilibrium among its important players. The present situation in Asia, in fact, can be characterized as a case of power disequilibrium.

– In Europe, the largest state and economy, Germany, does not aspire for dominance in Europe. Rather, in respect to the other European powers, it has learned and accepted to be one among equals. In Asia, the situation is quite the opposite.

– Many Asian states are today distinguished by wide and growing income disparities and social inequalities, as well as by environmental degradation. 

– While democracy has become the norm in Europe, that hardly can be said about Asia. In fact, only a minority of Asian states are really democratic.

To compound matters, there is neither any security architecture in Asia nor a structural framework for regional security. 

That raises the question: Is Asia going to be an arena of old-style, balance-of-power politics and thus crimp its ability to shape the new global order? Or will growing cooperation and interdependence, as well as prospects of shared prosperity and stability, propel Asian states to act as “responsible stakeholders” in the international system and help reform global institutions?

Asia, in fact, has come to symbolize how the global spread of democracy has run out of steam after the successes of the late 1980s and the 1990s. Today, the challenge to the international spread of democratic values comes from a fusion of autocratic politics and crony, state-guided capitalism. As a result, the spread of democracy now is encountering increasingly strong headwinds. The strategy to use market forces to open up tightly centralized political systems hasn’t worked in multiple cases in Asia – the pivot of global strategic change.

Against this background, it is important to ask: How will the new international order be influenced by the return or rise of authoritarian great powers? Will political autocracies show themselves to be compatible with free markets? If so, will the new order, far from being liberal, be centered on classical balance-of-power strategies of the major powers?

Today, the changing global power equations are reflected in new realities. These include the eastward movement of power and influence, once concentrated in the West; the waning relevance of the international structures the United States helped establish after its World War II triumph; and Asia’s growing international profile. While the world is not yet multipolar, it is no longer unipolar, as it had been from the time of the Soviet Union’s collapse to at least the end of the 1990s, a period in which America failed to fashion a new liberal world order under its direction. 

What we have today is a world still in transition. The world, clearly, is at a turning point in its history. The new global challenges and power shifts actually symbolize the birth-pangs of a new world order. Healthy, effective institutions in Asia and the wider world have become critical to building power stability and cooperative approaches. 

If Asia is to seize the new opportunities to play a role on the world stage commensurate with its size and economic clout, it has to develop institutionalized cooperation in different areas to develop strategic stability. On a host of issues, ranging from climate change and world trade talks to reform of international institutions, Asia can play a central role. 

At the same time, we should not forget that Asia, despite the opportunities, also faces important challenges. Asia may be coming together economically, as reflected in the plethora of FTAs in the region. But it is not coming together politically. If anything, it is becoming more divided.

In hindsight, improved geopolitics should have been as much of an Asian priority as greater economic interdependence. In today’s market-driven world, trade is not constrained by political differences, nor is booming trade a guarantee of moderation and restraint between states. We should remember that better politics is as important as better economics.

*Brahma Chellaney is Professor of Strategic Studies at the independent, privately funded Center for Policy Research in New Delhi.

Nuking rights of citizens

Posted on by
Reply

It’s no-risk, all-profit business for four firms

 

Brahma Chellaney

The Economic Times, August 24, 2010

 

It is a reflection of the murky politics in the country that the government was able to cut a deal with the main opposition party on the nuclear-accident liability bill, ignoring concerns that the legislation would weaken nuclear safety and deprive potential Indian victims of accidents the very rights American citizens have.

 

This is not the first time that unscrupulous politics has come to the aid of Prime Minister Manmohan Singh’s obsessive focus on the nuclear deal with the US. In July 2008, his government survived the “cash-for-votes” scandal over the nuclear deal with the help of the Samajwadi Party.

 

Today, thanks to the shadowy deal with the morally and intellectually bankrupt BJP, the political debate on the accident liability bill has boiled down to a secondary issue — the “right of recourse” of the state operator in India after an accident — while the main issue has been allowed to go by default. The primary issue is whether it is sensible for a poor country like India, where the “operator” of nuclear-power plants will remain the Indian state, to assume all liability on behalf of foreign reactor vendors.

 

What India has set out to do is unparalleled: Without inviting global bids or having first negotiated the price and terms of reactor supply, the government has earmarked a nuclear park exclusively for each of the four foreign vendors, GE, Westinghouse, Areva and Atomstroyexport. It is acquiring land on their behalf at these designated parks, where each vendor is to erect multiple reactors. The government, however, will run the reactors through its state operator, subsidizing the high-priced electricity generated.

 

Now, through the proposed accident-liability law, the suppliers also are being indemnified, with all liability (financial and legal) being channelled to the Indian state. In effect, India is offering no-risk, all-profit business opportunities to the four vendors to build 28 reactors worth some $76 billion.  

 

Given the high liability capacity being assumed — which could entail an average annual premium of nearly $1 million to be paid by the Indian taxpayer for each twin-reactor, foreign-built nuclear plant — foreign insurers are to be invited in. In case India in the future allows private players to also operate nuclear plants, the government has proposed an amendment to its own liability bill for the Indian republic to “assume full liability for a nuclear installation not operated by it.”

 

Yet few questions are being asked as to why the government is in an unseemly rush to pass such legislation and join the Convention on Supplementary Compensation, which hasn’t even come into force.

 

With the fundamental issues having been eclipsed from the debate, the focus has fallen on the right to recourse in the operator’s fiduciary liability policy. The government’s repeated attempts to dilute the right-to-recourse provisions against suppliers have exposed a disturbing dimension of the relationship between the executive branch and Parliament. First, a key word, “and”, was mysteriously added to the parliamentary standing committee’s text to water down those provisions.

 

When a furor greeted that surreptitious insertion, the government simply decided to supplant the committee’s agreed text with a new formulation that sets the right-to-recourse bar so high (“the nuclear incident has resulted as a consequence of an act of supplier or his employees, done with the intent to cause nuclear damage…”) as to render that right infructuous. All this raises troubling questions about the executive branch’s persistent moves to nullify a parliamentary committee’s work.

 

Broadly, the nuclear deal, which was pushed through without building “the broadest possible national consensus” that the PM had promised, has come to symbolize the decline of Indian politics, with self-aggrandizement replacing principles as the guiding philosophy for parties and national interests taking a back seat.

 

 (c) The Economic Times, 2010.

A win-win situation for foreign reactor vendors

Posted on by
Reply

Nuclear Deal: Elusive Benefits, Tangible Costs

Brahma Chellaney
The Hindu newspaper, August 19, 2010

With accident-liability protection constituting another layer of state subsidy to foreign reactor vendors, the spectre of dozens of Enrons in the nuclear-energy sector is real.

The controversial Indo-U.S. nuclear deal was pushed through without building “the broadest possible national consensus” that the prime minister had promised. Certain give-and-take is inevitable in any deal. But this deal has picked up such onerous conditions that it now threatens to cast a perpetual political albatross around India’s neck. To implement the deal, the government is now seeking to burden the Indian taxpayer on multiple counts — from state subsidy in the form of liability protection and acquisition of land on behalf of foreign vendors to guaranteeing subsidised price of electricity from the high-cost foreign reactors to be imported. The result is likely to saddle India with dozens of Enrons in the nuclear-energy sector.

The deal’s energy benefits, in fact, are years away and will come with heavy economic costs. One reminder of the costs is the proposed nuclear-accident liability legislation. The revised bill that has emerged from the parliamentary standing committee increases, not lessens, the load on the taxpayer. The bill actually seeks to enshrine a new principle in international law: Profits are private, accident-related liabilities are all public.

While U.S. law permits “economic channelling,” but not “legal channelling,” of liability, thereby allowing criminal proceedings and other lawsuits against any party in courts, the revised Indian bill channels all financial and legal liability to the Indian state operator, effectively indemnifying foreign reactor vendors. Nuclear safety can hardly be enhanced by freeing foreign suppliers upfront from responsibility for accidents caused by design flaws, pinning liability singly on the state operator, and vesting the right of recourse only with the operator by shutting out victims of accident.

Nuclear parks

A bigger indicator of the energy-related costs, however, has completely escaped public attention. The government has earmarked a nuclear park exclusively for each of the four favoured foreign vendors. GE-Hitachi is to build six reactors at Kovvada (Andhra Pradesh), Westinghouse another six at Mithi Virdi (Gujarat), Areva a further six at Jaitapur (Maharashtra), and Russia’s Atomstroyexport six more at Kudankulam (Tamil Nadu) and an additional four later at Hirapur (West Bengal).

The reservation of a nuclear park for each foreign vendor even before the terms of a reactor contract have been negotiated is anti-competitive and unparalleled. To add to the pampering, India is also acquiring land on behalf of these firms.

Despite an inherently anti-market process, the government contends the contracts will be based on competitive pricing. But by reserving a park solely for each foreign vendor, it has undercut its own bargaining leverage. Just like the arms deals of recent years, the reactor contracts are all set to be signed without open bidding. Indeed, since the deal was unveiled in 2005, India has signed billions of dollars worth of arms contracts with America on a government-to-government basis, although the U.S. has no public sector.

Worse yet, foreign firms are being freed from the task of producing electricity at marketable rates. The reactors will be run by the state operator, with the Indian taxpayer subsidising the high-priced electricity generated. It may take nearly a decade before the first foreign reactor under the nuclear deal comes on line, if one goes by Areva’s record in Finland and Atomstroyexport’s at Kundankulam, where completion of a twin-reactor station is years behind schedule.

Technology controls

Yet another jarring aspect is that despite the deal being in force internationally, India continues to battle major technology sanctions. The deal has not lifted all technology controls even in the civilian nuclear field: In late June, the G-8 countries renewed their ban on sale of civilian enrichment and reprocessing (ENR) technology and equipment, even under international safeguards, to a non-NPT state like India. The Indian foreign secretary has described as “anachronistic” the continuing U.S. export controls against India that extend beyond the nuclear realm to cover advanced technologies and target civilian entities like ISRO. The PM, however, had triumphantly announced in 2008 that the deal “marks the end … of the technology-denial regime against India.”

The idea to build energy “security” by importing foreign fuel-dependent power reactors is nothing but a money-spending boondoggle likely to leave India insecure and buffeted by outside pressures. That spectre has been underscored by the four big “No”s for India embedded in the final deal: No binding fuel-supply guarantee to avert a Tarapur-style fuel cut-off; no irrevocable reprocessing consent; no right to withdraw from its obligations; and no right to conduct a nuclear test ever again.

The government has shied away from discussing even the economics of producing electricity from foreign reactors. India’s heavily-subsidised indigenous nuclear-energy industry is supplying electricity at between 2.70 and 2.90 rupees per kilowatt hour from the reactors built since the 1990s. That price is far higher than the cost of electricity from coal-fired plants. But electricity from foreign-built nuclear reactors will be even dearer. That, in effect, will increase the burden of subsidies on the Indian taxpayer, even as the reactor imports lock India into an external-fuel dependency.

The revised accident-liability bill does well to double the permissible time period for filing accident-related claims against the state operator. Increasing the compensation fund is also welcome, although there is no need realistically for minimum or maximum cap on liability when the Indian state is making itself wholly responsible for damages from an accident. But most other changes that have emerged from the standing committee’s deliberations or from the government’s disingenuous deal-making with the BJP do not address the fundamental concerns, which centre on relieving foreign vendors of direct liability for any accident and abridging the legal rights of victims.

Indemnifying foreign suppliers helps to significantly lower their costs and risks of doing business in India. But in extending such protection, the bill aims to overturn the doctrine of “absolute liability” laid down by the Supreme Court that prevents “enterprises” (including the operator, supplier, builder and owner) from wriggling out of their liability by claiming exemptions, such as alleged sabotage. The Supreme Court held after the Bhopal gas disaster that, “The enterprise is strictly and absolutely liable to compensate all those who are affected by the accident and such liability is not subject to any of the exceptions which operate vis-à-vis the tortious principle of strict liability.” By that standard, foreign reactor vendors would be fully liable for any wilful act or gross negligence that causes a nuclear accident.

The bill, however, casts all liability on the state operator and the federal government. The liability bill thus is a major liability for the Indian taxpayer.

A way out

The sensible course of action in nuclear energy would be for the government to let foreign vendors acquire land on their own at designated sites, build and operate reactors, and sell electricity to distribution companies without the Indian taxpayer in any way being burdened. If foreign firms produce nuclear energy at competitive prices, the benefits for India will be real. Even the cap on accident liability can be arranged by emulating the U.S. example so that the Indian taxpayer is the insurer of last resort, not of first resort. For each major radioactive release, America’s Price-Anderson liability system provides more than $10 billion in total potential compensation through a complex formula that includes insurance coverage carried by the reactor that suffered the accident, “retrospective premiums” from each of the covered reactors in operation in the U.S., and a five per cent surcharge. The liability burden thus falls on the private sector.

The Indian government, however, has no intention to create an open, competitive field because that would unmask and obstruct the generous state subsidies it is offering for nuclear-generated power. It thus told Parliament categorically on August 12 that it “does not intend to change the related provision of the Atomic Energy Act, 1962, for private participation” in nuclear energy.

Creating an artificial market with no-strings subsidies and electricity supply at state-supported rates is no prudent way to meet energy needs. The proposed arrangements actually seek to create a win-win situation for foreign vendors by ensuring there is no downside to their business. By rigging commercial terms in favour of select foreign suppliers, the arrangements, in effect, promote unfair business practices and cartelisation.

( Brahma Chellaney is the author, among others, of Nuclear Proliferation: The U.S.-India Conflict.)

The U.S.-India nuclear deal

Posted on by
Reply

The wages of the nuclear deal

 

Brahma Chellaney

Mint, August 16, 2010

 

http://www.livemint.com/2010/08/15215312/The-wages-of-the-nuclear-deal.html

 

The quiet signing of the reprocessing agreement on 30 July has completed the last remaining bilateral element of the nuclear deal with the U.S. The multilateral elements are not only complete, but also being implemented. For example, India already has brought 16 of its nuclear facilities under permanent international inspection — a number scheduled to progressively go up to cover two-thirds of all Indian nuclear installations within four years. In addition, India is set to shut down by this year-end its main military-production workhorse, the Cirus reactor — the biggest cumulative contributor of weapons-grade plutonium to the country’s stockpile.

 

Yet, despite the deal being in force, India continues to battle major technology controls. China has greater access than India does to U.S. high technology, and this is unlikely to change after the ongoing Obama administration review of American export controls. Because the review is being driven by the barely disguised business goal to increase U.S. share of the Chinese market so as to reduce the yawning trade deficit, the China-India access gap can only widen in Beijing’s favour.

 

            What tangible benefits, strategic or otherwise, has the deal yielded for India? Let’s face it: The Americans were more honest than the Indians about the deal. The final deal has turned out to be in line with what the U.S. Congress mandated, not what the Indian Parliament had repeatedly been assured by Prime Minister Manmohan Singh.

 

            In fact, the deal conforms fully to the provisions of the 2006 Hyde Act. The congressional ratification legislation — the 2008 Nuclear Cooperation Approval and Non-Proliferation Enhancement Act, or NCANEA — actually tightened some of the Hyde Act provisions. The Indian side had publicly claimed that the Hyde Act would not determine the final deal, with some in authority even seeking to creatively differentiate between “operative” and “non-binding” parts of that Act. It had further been claimed that the 123 Agreement, once ratified, would become the “last expression of the sovereign will” and override all other laws including national laws.

 

These too-clever-by-half arguments have fallen flat on their face. Nothing can be more embarrassing to the Indian side than the fact that the bilateral accords it negotiated and signed — the 123 Agreement and the reprocessing pact — match up to U.S. congressional stipulations.

 

Worse still, the accords have been made subservient to American law. Take the 123 Agreement, which neither contains the international-law principle (found in the U.S.-China accord) that neither party will invoke its internal law as justification for a failure to honour the accord, nor provides (unlike the U.S.-Japan or U.S.-South Korea accord) for an arbitral tribunal to settle any dispute. As the NCANEA makes explicit, “Nothing in the [123] Agreement shall be construed to supersede the legal requirements of the Henry J. Hyde Act.”

 

As a result, the final deal ends up giving America specific rights — enforceable through the pain of unilateral suspension or termination of cooperation — while saddling India with obligations. The NCANEA actually records that the promise of uninterrupted fuel supply is a “political,” not legal, commitment. It cannot be anything else because the 123 Agreement itself confers an open-ended right on the U.S. to suspend fuel supplies straight away while issuing a one-year termination notice. In fact, as a corollary to that right, the U.S. has retained the prerogative in the reprocessing accord to unilaterally suspend its reprocessing consent to India.

 

            What stands out about the final deal are the four “No”s for India: No binding fuel-supply guarantee to avert a Tarapur-style fuel cut-off; no irrevocable reprocessing consent; no right to withdraw from its obligations; and no right to conduct a nuclear test ever again. The no-test obligation constitutes the first instance in the nuclear age where one nuclear-weapons power has used a civilian cooperation deal to impose such a prohibition on another nuclear-weapons state. The Cirus’s impending dismantlement is another weapons-related obligation thrust on India.

            No country in history has struggled longer to build a minimal deterrent or paid heavier international costs for its nuclear programme than India. Despite Asia’s oldest nuclear programme, India now has the world’s smallest nuclear arsenal — smaller than even Pakistan’s. More significant is that India still does not have a single Beijing-reachable nuclear missile in its inventory or production line. It is against that background that the nuclear deal marks a turning point.

 

The lasting legacy of the deal, in which the Indian government invested considerable time and diplomatic resources, will be to ensure that India stays enmeshed in its struggle to build regionally confined nuclear-weapons capability while becoming more reliant than ever on conventional arms imports to meet its basic defence needs. If ever there was hope of India becoming a full-fledged nuclear-weapons state like China, that prospect has passed.

 

A closer relationship with the U.S. is in India’s own interest. But it could have been built without a deal that carries serious, long-term costs. Indeed, such are the wages of the deal that India has refrained from speaking up on regional-security issues that directly impinge on its interests, including the continuing transfer of offensive U.S. weapon systems to Pakistan, now the largest recipient of American economic and military aid in the world. Islamabad, in fact, has managed to cut its own deal to buy two China-origin reactors without the burden of conditions cast on India.

 

Brahma Chellaney is professor of strategic studies at the Centre for Policy Research in New Delhi

 

Comments are welcome at theirview@livemint.com

Lift the wraps on the Himalayan border situation

Posted on by
Reply

Let facts speak for themselves on the India-China frontier

 

Brahma Chellaney

The Sunday Guardian, August 15, 2010

 

For almost 11 months now, the Indian government has put a lid on the Himalayan border situation with China. Ever since several senior government figures last September spoke out against the manner the media was covering Chinese border incursions, sources of information have dried up and newspapers and television networks have carried little news. It is not that the Chinese cross-border forays have ended or even abated. It is just that Indian media organizations have little information to report, even though the incidence of Chinese incursions remains high.

 

Beijing can only be pleased with the way New Delhi has managed to gag its own media over the border incidents.  The unwitting message that sends is that when the world’s biggest autocracy builds up pressure, the world’s largest democracy is willing to tame its own media.

 

Just as China has sought to pass off military incursions into Bhutan as instances of Chinese troops “losing their way,” soldiers of its People’s Liberation Army “lost their way” into Indian territory 270 times in 2008 alone — the last full year for which official figures are available. In addition, there were 2,285 instances of “aggressive border patrolling” by the PLA in 2008. Such a pattern of aggressive patrolling and intrusions has persisted to this day.

 

The plain fact is that the continuing border tensions reflect a growing strategic dissonance between China and India, which represent competing political and social models of development. Tibet has emerged at the centre of escalating Himalayan tensions. China has resurrected its long-dormant claim to Arunachal Pradesh — almost three times as large as Taiwan — and stepped up military pressure along the 4,057-kilometre frontier with India.

 

As the resistance to its rule in Tibet has grown, Beijing has sought to present Tibet as a core issue to its sovereignty. Tibet now holds as much importance in Chinese policy as Taiwan. But in spotlighting the Arunachal issue, Beijing seems to be drawing another analogy, even if unwittingly: Arunachal is the new Taiwan that must be “reunified” with the Chinese state.

 

Tibet, however, has always been the core issue in Sino-Indian relations. After all, China became India’s neighbour not owing to geography but guns — by annexing buffer Tibet in 1951. Today, Beijing is ever ready to whip up diplomatic spats with Western nations that extend hospitality to the Dalai Lama. But India remains the base of the Tibetan leader and his government-in-exile.     

 

The key instigation in the more-muscular Chinese stance towards India clearly has come from the U.S.-Indian strategic tie-up, unveiled first in 2005. As President George W. Bush declared in his valedictory speech, “We opened a new historic and strategic partnership with India”.

 

Since then, the official Chinese media has started regurgitating the coarse anti-India rhetoric of the Mao Zedong era, with commentators warning New Delhi not to forget the lesson of 1962, when China humiliated India in a 32-day, two-front war. The Chinese Communist Party’s mouthpiece, the People’s Daily, earlier charged India with pursuing a foreign policy of “befriending the far and attacking the near,” while a commentary by the China Institute of International Strategic Studies — a PLA think-tank — cautioned India “not to requite kindness with ingratitude” and not to “misjudge the situation as it did in 1962”.

 

Against that background, India’s interests will be better served by letting the facts on the border situation with China speak for themselves.

 

In recent years, China has opened pressure points against India across the Himalayas, with border incidents occurring in all the four sectors. Chinese forces are intruding even into Utttarakhand (although the line of control in this middle sector was clarified in 2001 through an exchange of maps) and into Sikkim (whose 206-kilometer border with Tibet is not in dispute and indeed is recognized by Beijing). Yet, Indian officials have said the incursions are the result of differing perceptions about the line of truth. That may be so about Arunachal Pradesh and Ladakh, but can that be true about Sikkim and Uttarakhand? It speaks for itself that Beijing hasn’t offered this lame excuse.

 

Even in the pre-1962 period, India sought to play down China’s aggressive moves along the border. The result was “the stab in the back” in 1962, as Jawaharlal Nehru called it.

 

In fact, there are important parallels between the situation pre-1962 and the situation now. Border talks are regressing, Chinese claims on Indian territories are becoming publicly assertive, Chinese cross-border incursions are rising, and India’s China policy is becoming feckless.

Indeed, what stands out in the history of Sino-Indian disputes is that India has always been on the defensive against a country that first moved its frontiers hundreds of miles south by annexing Tibet, then furtively nibbled at Indian territories before waging open war, and now lays claims to additional Indian territories. By contrast, on neuralgic subjects like Tibet, Beijing’s public language still matches the crudeness and callousness with which it sought in 1962, in Premier Zhou Enlai’s words, to “teach India a lesson.”

     

The irony is that by laying claims to additional Indian territories on the basis of their purported ties to Tibet, China blatantly plays the Tibet card against India, going to the extent of citing the birth in Tawang of one of the earlier Dalai Lamas, a politico-religious institution it has systematically sought to destroy. Yet India remains coy to play the Tibet card against China.

 

The net result of failing to use Tibet as a bargaining chip has been that India first lost Aksai Chin, then more territory in 1962 and now is seeking to fend off Chinese claims to Arunachal Pradesh.

 

Beijing openly covets Arunachal Pradesh as a cultural extension to Tibet — a classic attempt at incremental annexation. Just because the 6th Dalai Lama was born in the 17th century in Arunachal’s Tawang district, Beijing claims that Arunachal belongs to Tibet and thus is part of China. By that argument, it can also lay claim to Mongolia as the 4th Dalai Lama was born there in 1589. The traditional ecclesiastical links between Mongolia and Tibet indeed have been closer than those between Arunachal and Tibet. What makes China’s claim more untenable is that, as part of its gerrymandering of Tibet, it has hived off the birthplaces of the 7th, 10th, 11th and present Dalai Lama — the 14th in line — from Tibet. Before seeking Arunachal, shouldn’t it be asked to first return the traditional Tibetan areas of Amdo and eastern Kham to Tibet?

NPT’s challenges now come from within its regime

Posted on by
Reply

Saturday, Aug. 7, 2010  The Japan Times

The NPT’s uncertain future

 
This year marks the 40th anniversary of the Nuclear Nonproliferation Treaty’s coming into force. Despite its central role in shaping the global nuclear order, the NPT’s future looks anything but promising.

The main challenges the NPT now faces come from within its regime, not from the nonparties. The nations outside the NPT fold that wanted to go nuclear have done so. And having acquired nuclear weapons, those states are in no position to join a treaty that essentially is rigidly structured and is thus not amendable.

It has been widely forgotten that the NPT originally was intended to prevent countries like Japan, West Germany and Italy from acquiring nuclear weapons. Japan, did not ratify the treaty until 1976 — eight years after the NPT was concluded, and six years after the pact took effect. Over the years, however, the challenges to the NPT have come from outside the list of its original targets.

It is remarkable that the NPT has survived for so long and that it was extended indefinitely in 1995. As a result of the 1995 action, the treaty — originally conceived as a 25-year bargain between nuclear-weapons states and nonnuclear-weapons states — has become permanent.

For the foreseeable future, nuclear weapons, with their unparalleled destructive capacity, are likely to remain at the center of international power and force capacity. Nuclear weapons, as the 2002 U.S. nuclear posture review stated, will continue to play a "critical role" because they possess "unique properties."

Some 95 percent of all nuclear weapons are in the arsenals of the United States and Russia. The U.S. has announced recently that it has 5,113 nuclear weapons in its arsenal, plus "several thousand" more waiting to be dismantled. Russia is believed to have a fairly similar number of nuclear weapons in deployment.

Although their arsenals have declined, both Russia and the U.S. still maintain "overkill" capabilities — that is, either can destroy the entire world several times over. There can be no justification for maintaining such large arsenals today, and the reductions proposed by the new Strategic Arms Reduction Treaty (START) between the U.S. and Russia will not change the overkill capacities of the two sides.

The latest U.S. Nuclear Posture Review (NPR) incorporates a welcome shift by proclaiming that the U.S. will not use nuclear weapons against a nonnuclear-weapons state or in response to a nonnuclear attack. Yet that assurance is hedged with caveats — the nonnuclear-weapons states have to be fully "in compliance" with their nonproliferation obligations; and given the catastrophic potential of biological weapons, the U.S. reserves the right to respond with nukes against a biological attack.

It would have been better had the posture review made clear — without any qualification — that the sole purpose of nuclear weapons is to deter a nuclear attack. Instead, the NPR declares such a sole purpose as a long-term goal. With the burden of the Nobel Peace Prize weighing heavily on U.S. President Barack Obama’s mind, the caveat-ridden NPR comes across as being more posture than review.

Given the fact that every nuclear- weapons state, by definition, is a proliferator, the varying standards still being applied on proliferation underscore the nonproliferation challenges. Geopolitical interests, rather than objective criteria, usually determine a response to any proliferation problem. Also, who is a legitimate nuclear-weapons state or who is not has remained a subject of controversy. The NPT recognizes as nuclear powers only those countries that tested a nuclear device before 1967. But it is hardly a good advertisement for the NPT regime that some nuclear-weapons states remain outside its fold.

Actually, the real "success" of the NPT has been in reinforcing the system of extended deterrence by giving countries such as those in NATO and others like Japan, Australia and South Korea little choice other than to continue to rely on the U.S. for nuclear-umbrella protection. Minus the NPT, these countries would have been the most-likely candidates to go nuclear because they also happen to be the most-capable states technologically. So, the effect of the NPT has been to either strengthen extended deterrence or to drive nuclear programs underground, as was symbolized by North Korea.

A few technologically capable countries, like Sweden and Switzerland, of course, voluntarily relinquished their nuclear-weapons option even while staying out of any alliance system. Their decision was based on a careful judgment that their security would be better protected without nuclearization.

Today, a key question that arises is whether any of the countries ensconced under the U.S. nuclear umbrella would be willing to forgo the benefits of extended deterrence in order to help lower the utility of nuclear weapons and give a boost to the cause of nuclear disarmament.

Today, the world has a treaty (although not in force) that bans all nuclear testing but no treaty to outlaw the use of nuclear weapons. In other words, those that are party to the Comprehensive Test Ban Treaty are prohibited from testing a nuclear weapon at home but are legally unencumbered to test the weapon by dropping it over some other state. That anomaly must be removed.

Brahma Chellaney is the author of the 2010 international best-seller, "Asian Juggernaut" (HarperCollins).

The Japan Times: Saturday, Aug. 7, 2010
(C) All rights reserved