BRICS falls under China’s sway

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There’s a real risk that BRICS could unravel under the weight of the BRICS wall of China that Beijing is busy erecting
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BY The Japan Times

Adding concrete content to a catchy acronym has become a pressing challenge for BRICS, which brings Brazil, Russia, India, China and South Africa together. BRICS presents itself meretriciously as a powerful grouping. After all, its member-states together represent more than a quarter of the Earth’s landmass, 42 percent of the global population, almost 25 percent of the world’s gross domestic product, and nearly half of the global foreign exchange and gold reserves.

However, as the October BRICS summit in Goa highlighted, there is little in common among its member-states. Although these five emerging economies pride themselves on forming the first important non-Western global initiative, the grouping is still searching to define a common identity and build institutionalized cooperation.

Six years after it expanded from a four-member BRIC to the five-nation BRICS by adding South Africa, it has yet to unveil a common action plan to help bring about fundamental changes in the architecture of global finance and governance or to accelerate the decline of the era of Atlantic dominance.

BRICS lacks the shared political and economic values that bind together the Group of Seven members, who are also tied by security arrangements with the United States. In BRICS, differences outweigh commonalities. As the Goa summit highlighted, China, which is milking BRICS for tangible benefits, represents the biggest challenge to the grouping’s future. Just as China dominates the other new institutions of which it is a founding member — from the Shanghai Cooperation Organization to the Asian Infrastructure Investment Bank (AIIB) — it is using BRICS to assertively push its own interests.

China also dominates the first tangible challenge to the Bretton Woods system, as symbolized by the BRICS-created New Development Bank (NDB) and China’s own initiative, the AIIB.

BRICS has fashioned two instruments — the New Development Bank, which has been given $50 billion in initial capital, and the $100-billion Contingent Reserve Arrangement, or CRA, meant to provide additional liquidity protection to member countries during balance-of-payments problems. Both these instruments have come under China’s sway.

For example, China outmaneuvered India to host the NDB at Shanghai, offering New Delhi a consolation prize — an Indian as the bank’s first president. The CRA — unlike the pool of initial capital to the BRICS bank, with each of the five signatories contributing $10 billion — is being funded 41 percent by China, 18 percent from Brazil, India, and Russia, and 5 percent from South Africa.

Today, China is in the happy situation of overseeing the NDB and the AIIB, not to mention the CRA. Leading two new multilateral banks fits well with Beijing’s strategy to create an “economic hub-and-spoke system” via energy pipelines, strategic highways and ports, and railroad networks. In this scheme, China, as the hub, seeks to draw in raw materials and other natural resources from the spokes, while exporting industrial and consumer goods to them.

China’s “economic hub-and-spoke system” is to parallel America’s military hub-and-spoke system. But it is an “economic hub-and-spoke system” with a strategic mission. China’s infrastructure development in other states is driven, as during the European colonial era, by a specific interest — to advance its own interests while saddling local communities and governments with heavy debt and human and environmental costs.

Against this background, it is not a surprise that China is a revisionist power with respect to the global financial architecture, but a status quo power in regard to the United Nations system. In other words, China supports international institutional reforms that give it a greater say but blocks measures that will dilute its existing status.

So it is an obstacle to restructuring and democratizing the Security Council. It wants to remain Asia’s sole permanent member of the Security Council. And as underscored by its 2016 presidency of the Group of 20, China values the G-20 as a vehicle to enlarge its role in global economic governance while seeking to retain those elements of the present trade and financial architecture that have facilitated its dramatic economic rise.

Meanwhile, it is using BRICS to expand the international role of its currency as part of its quest to build the yuan as a global currency that could one day rival the dollar or euro. So it is lending and trading in yuan with the other BRICS members.

China’s hidden export subsidies, for their part, are steadily undermining manufacturing in the other BRICS states, even as its adept use of tariff and non-tariff barriers shuts out, from its own market, goods and services in which they have a comparative advantage. For example, China’s trade surplus with India has doubled since 2014 alone to nearly $60 billion, threatening India’s domestic manufacturing base. An article last month in China’s state-run Global Times mockingly said: “Let the Indian authorities bark about the growing trade deficit with China. The fact of the matter is they cannot do anything about it.”

At the Goa summit, Chinese President Xi Jinping flexed his muscles to keep the South China Sea issue out of the Goa Declaration and to shield Pakistan from its sponsorship of terrorism, with the declaration citing U.N.-designated terrorist groups in the Middle East but not the ones based in Pakistan.

China’s “core leader” in Goa called for “political solutions” to “regional hotspots” even as his government adds fuel to regional fires through a relentless territorial creep in the South China Sea and by embarking on a $46 billion corridor to the Indian Ocean through Pakistan-held Jammu and Kashmir, a U.N.-recognized disputed region. How can BRICS create rules-based cooperation among its members if international norms of conduct are flouted in such a manner?

The Goa summit indeed was a reminder of China’s lengthening shadow over BRICS. As China uses the grouping to push its own agenda, BRICS has been left carrying the can. The risk is real that the grouping could collapse under the weight of the BRICS wall of China that is being erected.

Brahma Chellaney is a geostrategist and author and a long-standing contributor to The Japan Times.

© The Japan Times, 2016.

Aung San Suu Kyi’s diplomatic balancing act

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Sustaining “neutrality” in foreign policy will likely prove a challenge for Myanmar’s de facto leader

Brahma Chellaney, Nikkei Asian Review

aung-san-suu-kyiIn keeping with the untrammeled power she enjoys in her ruling National League for Democracy party, Myanmar’s de facto leader Aung San Suu Kyi is rapidly putting her imprint on her country’s international relations. She has shaken up Myanmar’s diffident foreign policy establishment by proactively seeking to build partnerships with multiple powers. But rather than pronouncing a “Suu Kyi doctrine” in foreign policy, she is allowing her actions to define her approach.

Suu Kyi’s approach is unmistakable — a nondoctrinaire vision with pragmatism as the hallmark, that aims to build equilibrium in relations with major powers and underscore Myanmar’s potential role as a bridge between different regions, cultures and powers. Myanmar’s geographic and geostrategic position makes it the natural bridge between South and Southeast Asia and between the demographic titans, China and India.

Myanmar is as large as Britain and France combined. Yet by coming under severe U.S.-led sanctions, Myanmar was strikingly left out of Asia’s economic boom of the past generation. Since 2011, its democratic transition — cemented by NLD’s landslide election victory nearly a year ago — has reversed its fortunes, with a number of countries jockeying to exploit the economic opportunities it offers.

Suu Kyi seems to believe that, through a dynamic foreign policy, she not only can advance Myanmar’s economic and security interests but also play the role of a facilitator between rival powers, including between China and Japan. Myanmar’s economic and political vulnerability, however, crimps Suu Kyi’s ambitious diplomacy, forcing her to perform a delicate balancing act between major powers vying for influence.

Take China, with which Myanmar shares a 2,129km border: As if to signal that her country’s pro-China tilt and dependence on Beijing was an aberration fostered by crippling U.S.-led sanctions for nearly a quarter century, Suu Kyi committed, soon after coming to power, to revive the country’s tradition of pursuing a neutral foreign policy. Yet, her first visit to a major capital was to Beijing in August.

The plain fact is that even though China impeded the Suu Kyi-led democracy movement by siding with Myanmar’s military rulers, its aggressive pursuit of strategic and resource interests has left it with considerable clout in the country. It accounts for about half of Myanmar’s foreign investment and 40% of its trade, with new multibillion-dollar oil and gas pipelines leading from Myanmar’s western coast to southern China.

Pecking order

Four weeks after her China trip, Suu Kyi visited the U.S., leading her country’s delegation to the United Nations General Assembly in New York and then meeting with U.S. President Barack Obama at the White House. The White House meeting led to Obama’s Oct. 7 executive order lifting U.S. economic sanctions on Myanmar.

Now, after a recent tour of the world’s largest democracy — next-door India — Suu Kyi is set to visit Asia’s oldest, and richest, democracy, Japan, from Nov. 1. That Suu Kyi prioritized visits to Beijing and Washington over trips to New Delhi where she was educated, and Tokyo, Myanmar’s largest provider of debt relief, showed that she regards India and Japan as of lesser importance to her country’s interests than China and the U.S.

Yet the fact is that Japan and India, with traditionally close ties to Myanmar, have played key roles in helping to end the country’s pariah status and reintegrating it regionally. Myanmar indeed was a province of India until 1937 in the British Indian empire before it become a separate colony, only to be occupied during 1941-45 by Japan, which established the country’s first postcolonial state and army. After Myanmar gained independence from Britain in early 1948, Japan played a major role in Myanmar’s economic development by allocating war reparations and official development assistance.

Suu Kyi’s Oct. 16-19 India tour was part of New Delhi’s invitation to member states of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation for a joint summit in the beach resort of Goa with Brazil, Russia, India, China and South Africa, collectively known as BRICS. The Bay of Bengal Initiative, which brings together Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand, is seen as a better alternative than the China-proposed Bangladesh-China-India-Myanmar corridor because it is more inclusive and seeks to reintegrate the region along its historical axis.

Even before her party formed a new government on Mar. 31, Suu Kyi appealed for more aid from Japan, which, since the start of Myanmar’s democratic transition, has dramatically increased its official development assistance, besides forgiving large amounts of debt and investing in ambitious projects. Japanese Prime Minister Shinzo Abe’s government responded to Suu Kyi’s appeal through additional loans and grant assistance.

A huge debt write-off by Japan, totaling about $3.3 billion, has helped Myanmar to clear its arrears to the World Bank and Asian Development Bank, opening the path for aid donors to support the country’s reform process. By setting up the giant Thilawa special economic zone, southeast of Yangon, the largest city, Japan has made major investments to establish Myanmar as a regional manufacturing hub. It has also invested in infrastructure and urban-development projects, including in Yangon’s water, sewage and electricity facilities.

However, the sluggish pace of reforms in Myanmar, including liberalizing land rights, tightening fiscal management and opening the financial sector, has impeded the Abe government’s larger strategy to reduce the Mekong region’s dependence on China by strengthening intraregional trade links. Suu Kyi’s five-day Japan visit offers her an opportunity to allay Japanese concerns over Myanmar’s reform process and her own “neutral” foreign policy.

China, however, represents the biggest test of Suu Kyi’s diplomacy. How long will she be able to walk the tightrope on a country that poses the most complex challenge for Myanmar?

China, by strategically penetrating Myanmar, has not only armed itself with formidable leverage but also sought to turn the country into its corridor to the Indian Ocean. Having established a firm foothold in Myanmar’s Bay of Bengal port of Kyaukp hyu, Beijing is seeking to open a shorter, cheaper trade route to Europe via Myanmar’s River Irrawaddy, which flows south from near the Chinese border to the Andaman Sea.

China holds the keys to ending decades of ethnic conflict in Myanmar, including by cutting off the flow of arms to guerrilla groups and exercising its clout over several key insurgent leaders. But it is unclear whether Beijing, despite being invited by Suu Kyi to play mediator, will genuinely aid her effort to build ethnic peace or use its role as a broker between the government and guerrilla groups to merely underpin its own leverage. A crucial peace conference hosted by Suu Kyi in the capital Naypyitaw ended in early September without any tangible progress.

Meanwhile, to deflect Chinese pressure to resume the Beijing-sponsored Myitsone Dam project, Suu Kyi has appointed a 20-member commission to review the previous government’s decision to suspend it. The $3.6 billion project was designed to generate electricity largely for export to China while saddling Myanmar with human and environmental costs. But its 2011 suspension carried major strategic ramifications: While representing a slap in the face to China, it became a watershed moment for Myanmar, accelerating its democratic transition and ending the country’s international isolation.

Politically speaking, Suu Kyi can ill afford to revive a dam project that she slammed as the opposition leader. The project indeed is despised in Myanmar as an epitome of China’s neocolonial policies toward smaller countries. Through the commission, however, Suu Kyi can help China save face, if Myanmar agrees to pay compensation. Beijing could plow that compensation into new deals for smaller, environmentally friendly hydropower plants.

In concept, Suu Kyi’s “neutrality” in foreign policy seems attractive, potentially allowing her to carefully balance cooperation with all the major players in a way that advances Myanmar’s interest, without the country being forced to choose one power over another. Building such multidirectional collaboration can definitely help Myanmar to advance its development and security.

In reality, though, it might be difficult for an aid-dependent, internally torn Myanmar to sustain a neutral foreign policy. Despite her diplomatic balancing act, Suu Kyi’s approach faces major challenges, including an arc of insurgencies in Myanmar and the attempt by various powers to treat the country as a chessboard of geopolitics.

Brahma Chellaney is a geostrategist and the author of nine books.

 

© Nikkei Asian Review, 2016.

Why Japan and India must be partners in Myanmar

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A Japan-India partnership on major projects in Myanmar can help reduce the salience of Chinese influence there.

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BY BRAHMA CHELLANEY, The Japan Times, October 19, 2016

Myanmar’s de factor leader, Aung San Suu Kyi, is seeking to carefully balance relations with major powers as part of her commitment to revive the country’s tradition of employing a neutral foreign policy. Suu Kyi’s India visit this week follows trips to Beijing and Washington.

Myanmar’s geographic, cultural and geostrategic positioning between India and China makes it critical to the long-term interests of both these powers.

Crippling U.S.-led sanctions since the late 1980s pushed resource-rich Myanmar into China’s strategic lap. Sanctions without engagement have never worked. During his 2010 Indian tour, U.S. President Barack Obama criticized India’s policy of constructive engagement with Myanmar, only to return home and pursue, within months, a virtually similar policy. The shift in U.S. policy helped to spur Myanmar’s reform process, thereby ending half a century of military-dominated rule.

Yet today the Obama White House is ignoring that lesson by pursuing a sanctions-only approach toward North Korea, which recently carried out its fifth and most-powerful nuclear test and then conducted a failed missile test launch last weekend.

On her first visit to a major capital since her National League for Democracy (NLD) party came to power almost seven months ago, Suu Kyi in August visited Beijing, not New Delhi where she was educated. Her aim was to smooth over the frayed relationship with China. Ties with China have been roiled by Myanmar’s 2011 suspension of the $3.6 billion, Chinese-financed Myitsone Dam project. The suspension on the eve of China’s national day constituted a slap in the face to Beijing — a loss of face made worse by the fact that the action became a turning point for Myanmar’s democratization and reintegration with the outside world.

The bold move, by demonstrating to Washington that Myanmar was no client state of China and by helping to both change U.S. policy and accelerate the country’s own transition to democracy, set in motion an easing of Western sanctions and ending Myanmar’s international isolation — best symbolized by Obama’s 2012 visit.

After work on the Myitsone Dam was halted midway, China’s relations with Myanmar perceptibly cooled, with several energy and other dam projects also put on hold. Beijing, however, managed to complete multibillion-dollar oil and gas pipelines from Myanmar’s western coast to southern China.

With the rise of a democratically governed Myanmar that is being wooed by all powers and by international investors, China can no longer push its strategic and resource interests by brushing aside questions about the environmental and human costs of its mining and other projects there.

But with China still wielding more leverage over Myanmar than any other power, President Xi Jinping is pushing for the Myitsone project’s revival — or the undoing of the 2011 humiliation. To deflect Chinese pressure, Suu Kyi, before visiting Beijing, appointed a 20-member commission to review Myitsone and other dam projects on River Irrawaddy, the country’s lifeline.

After her China trip, Suu Kyi, as part of her balancing act, visited Washington, where she was warmly received Sept. 14 at the White House. But it was only on Oct. 7 — about 11 months after the NLD won a landslide election victory — that Obama lifted U.S. economic sanctions on Myanmar through an executive order terminating an emergency directive that deemed the policies of its former military government a threat to U.S. national security. Military-related sanctions, however, have been retained.

Suu Kyi, accompanied by key ministers, traveled to India to attend a weekend multinational summit in Goa and then hold bilateral meetings with Prime Minister Narendra Modi and other top officials in New Delhi.

Her visit was part of India’s invitation to member states of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) for a joint summit with the five-nation BRICS (Brazil, Russia, India, China and South Africa) in Goa. Suu Kyi thus met with a host of world leaders in Goa, including Russian President Vladimir Putin and China’s Xi.

Bringing together Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand, BIMSTEC holds more promise than the South Asian Association for Regional Cooperation (SAARC), which is likely to remain a stunted organization, largely because of regional concerns over terrorism emanating from one of its members, Pakistan. A SAARC summit scheduled for next month in Islamabad collapsed after India, Afghanistan and Bangladesh accused Pakistan’s Inter-Services Intelligence agency of orchestrating recent terrorist attacks within their borders.

Myanmar is India’s gateway to the east. It was at the India-ASEAN summit in Myanmar’s capital Naypyitaw in late 2014 that Modi launched India’s U.S.-backed “Act East” policy.

When Suu Kyi was in the opposition, India supported Suu Kyi’s democracy movement and sheltered many Myanmar refugees and dissidents, despite engaging with Myanmar’s military government in a carefully calibrated manner to promote political reconciliation and to stem China’s growing clout there.

Today, a key challenge for both Myanmar and India is to manage a difficult and complex relationship with China. Just as India’s northern neighbor historically was Tibet, not China, Myanmar’s neighbor for much of its early history was the independent kingdom of Yunnan, with Tibet also sharing a border with Myanmar until 1950.

Myanmar, like India, has long complained about the flow of Chinese arms to local guerrilla groups, accusing Beijing of backing several of them in its north as levers against it. Still, recognizing that Beijing holds the keys to ending decades of armed conflict in Myanmar, Suu Kyi has given China an important role in her new initiative to promote ethnic reconciliation. Yet, despite China playing mediator, a Suu Kyi-sponsored peacemaking gathering attended by ethnic warlords in Naypyitaw ended in early September without any headway.

China values Myanmar as a strategic asset, viewing its long shoreline as a gateway to the Indian Ocean, where it is seeking to chip away at India’s natural-geographic advantage. Having established a foothold in Myanmar’s Bay of Bengal port of Kyaukpyu, from where new energy pipelines lead to southern China, Beijing is now seeking to open a shorter, cheaper trade route to Europe via Myanmar’s River Irrawaddy, which flows in a southerly direction from near the Chinese border to the Andaman Sea.

Against this backdrop, India can ill afford to neglect Myanmar or persist with its sluggish implementation of projects there. It must actively involve itself in Myanmar, including by collaborating with Japan, with which it enjoys fast-growing strategic cooperation. The giant Thilawa industrial zone southeast of Yangon symbolizes Japan’s investment campaign in Myanmar to gain access to a new market and counterbalance China.

Greater Indian investment in and counterinsurgency cooperation with Myanmar, coupled with an India-Japan partnership on major projects in that country, can help reduce the salience of Chinese influence there and further Suu Kyi’s agenda for a balanced, neutral and pragmatic foreign policy.

Brahma Chellaney is a Richard von Weizsacker Fellow at the Robert Bosch Academy in Berlin and a professor of strategic studies at the Center for Policy Research in New Delhi.

© The Japan Times, 2016.

Why India must not neglect Myanmar

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Brahma Chellaney, The Times of India, October 15, 2016

downloadThe visit of Aung San Suu Kyi, Myanmar’s de factor leader, to India is significant. Myanmar’s geographic, cultural and geostrategic positioning between India and China makes it critical to long-term Indian interests. Yet it took 25 years for an Indian prime minister to visit Myanmar, India’s gateway to the east.

Since that visit in 2012 by Manmohan Singh, India has upgraded its Myanmar policy from constructive engagement to comprehensive interconnection. It was at the India-ASEAN Summit in Myanmar’s capital Naypyidaw in late 2014 that Narendra Modi launched India’s “Act East” policy. Yet, for his own inauguration in office, Modi invited leaders of all regional states, including Mauritius, but not next-door Myanmar, in a reminder of how India episodically neglects an important neighbour.

Suu Kyi’s visit is part of India’s invitation to member-states of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) for a joint summit with BRICS at Goa. Bringing together Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand, BIMSTEC is a better alternative for India than the South Asian Association for Regional Cooperation (SAARC), which is likely to remain a stunted organization. Indeed, SAARC boxes India in an artificial regional framework; India’s natural strategic compass is broader.

Suu Kyi, committed to reviving her country’s old tradition of a neutral foreign policy, is seeking to carefully balance relations with major powers. On her first visit to a major capital since her party won a landslide election victory less than a year ago, Suu Kyi in August visited Beijing, not New Delhi where she was educated. Her aim was to smooth over the frayed relationship with China. Ties with China have been roiled by Myanmar’s 2011 suspension of the $3.6-billion, Chinese-financed Myitsone Dam project.

The suspension on the eve of China’s national day constituted a slap in the face to Beijing — a loss of face made worse by the fact that the action became a turning point for Myanmar’s democratization and reintegration with the outside world. The bold move, by demonstrating that Myanmar was no client state of China and by helping to accelerate the country’s transition to democracy, set in motion an easing of Western sanctions and ending Myanmar’s international isolation — best symbolized by Barack Obama’s 2012 visit, the first ever by a U.S. president.

But with China still wielding more leverage over Myanmar than any other power, President Xi Jinping is now pushing for the Myitsone project’s revival — or the undoing of the 2011 humiliation. To blunt Chinese pressure, Suu Kyi, before visiting Beijing, appointed a 20-member commission to review the project.

After her China trip, Suu Kyi, as part of her balancing act, visited Washington, where she was warmly received. But it was just last weekend that Obama lifted U.S. economic sanctions on Myanmar, while retaining military-related sanctions.

Myanmar, like India, has long complained about the flow of Chinese arms to guerrilla groups, accusing Beijing of backing several of them in its north as levers against it. Still, recognizing that Beijing holds the keys to ending decades of armed conflict in Myanmar, Suu Kyi has given China an important role in her new initiative to promote ethnic reconciliation. Yet, despite China playing mediator, a Suu Kyi-sponsored peacemaking gathering attended by ethnic warlords in Naypyidaw ended early last month without any headway.

China values Myanmar as a strategic asset, viewing its long shoreline as a gateway to the Indian Ocean, where it is seeking to chip away at India’s natural-geographic advantage. Having established a foothold in Myanmar’s Kyaukpyu port, from where the new energy pipelines lead to southern China, Beijing is seeking to open a shorter, cheaper trade route to Europe via Myanmar’s River Irrawaddy.

Against this backdrop, India can ill afford to neglect Myanmar, or persist with its sluggish implementation of projects there, or unilaterally conduct cross-border military strikes on Naga guerrillas. While being sensitive to Myanmarese concerns, India must actively involve itself in Myanmar through greater trade, investment and counterinsurgency cooperation to help reduce the salience of Chinese influence and to further Suu Kyi’s agenda for a balanced, neutral and pragmatic foreign policy.

Brahma Chellaney is a geostrategist and the author, most recently, of “Water, Peace, and War.”

© The Times of India, 2016.

Mending Pakistan’s behaviour

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Brahma Chellaney, Mint, September 20, 2016

ypicAfter the bloody cross-border terrorist attack on an army camp in Uri, near the Line of Control with Pakistan, it will be difficult for Prime Minister Narendra Modi’s government to return to business as usual. Uri is just the latest in a string of important Pakistan-orchestrated strikes on Indian targets since Modi’s 2014 election victory: The other attacks occurred at Herat, Mazar-i-Sharif and Jalalabad in Afghanistan and at Mohra, Gurdaspur, Udhampur, Pathankot and Pampore in India.

New Delhi’s response to all the attacks has been characterized by one common element — all talk and no action. This is no different than the response of the governments of Manmohan Singh and Atal Bihari Vajpayee to major terrorist strikes on their watch, including at Mumbai and on Parliament and the Red Fort. It would seem that Indian leaders live up to the biblical adage, “Let every man be swift to hear, slow to speak, slow to wrath”.

With successive governments failing to pursue a coherent, resolute and unflinching strategy to combat Pakistan’s proxy war by terror, India continues to be terrorized, assaulted and bled by a smaller neighbour. A scofflaw Pakistan believes it can continue to gore India with minimal or manageable risks of inviting robust Indian retaliation. The Indian public’s patience, however, has worn thin, putting pressure on the government to start imposing deterrent costs on Pakistan so as to stem the increasingly daring terrorist strikes.

Modi’s own credibility is now at stake. Modi responded to the terrorist storming of the Pathankot air force station at the beginning of this year by sharing intelligence about the attackers with Islamabad and allowing a Pakistani team to visit the base for investigations. This was done in the naïve hope of winning Pakistan’s anti-terror cooperation. Modi’s exchange of saris and shawls with his Pakistani counterpart, Nawaz Sharif — as well as his surprise visit to Lahore to wish Sharif on his birthday and attend his granddaughter’s wedding — attested to how New Delhi was focused on optics rather than on outcomes.

The Uri attack offers Modi a chance to redeem himself on the anti-terror front. How he responds to the latest terror outrage could help shape his political legacy.

Let’s dispel with the fiction that a country can get peace by seeking peace with a renegade, terrorism-exporting neighbour. Each time terrorists sent from Pakistan carry out a barbaric attack in India, Indians circle back to a familiar question: What makes Pakistan sponsor terrorism across its borders? The answer is simple: Waging an unconventional war remains an effective, low-cost option for Pakistan against a larger, more-powerful India. The real question Indians must debate is whether India is making Pakistan bear costs for scripting cross-border terrorism.

India has a range of options in the military, economic and diplomatic realms to start imposing costs on Pakistan, in a calibrated and gradually escalating manner. Strategically, an unconventional war waged by a nuclear-armed nation can be effectively countered only through an unconventional war. Let’s be clear: Pakistan is more vulnerable to asymmetric warfare than India, which also has greater economic and diplomatic resources to squeeze that country.

If India jettisons the 1960 Indus Waters Treaty (IWT), it can fashion water into its most-potent tool of leverage to mend Pakistan’s behaviour. Pakistan has consistently backed away from bilateral agreements with India — from the Simla accord to the commitment not to allow its territory to be used for cross-border terrorism. So why should India honour the IWT?

When Pakistan refuses to observe the terms of the 1972 peace treaty signed at Simla, it undercuts the IWT. It cannot selectively demand India’s compliance with one treaty while it flouts a peace pact serving as the essential basis for all peaceful cooperation, including sharing of river waters.

The IWT ranks as the world’s most lopsided and inequitable water pact: It denies India the basic right to utilize the waters of the rivers of its own state of Jammu and Kashmir for industrial and agricultural production. The main J&K rivers — the Chenab, Jhelum and Indus — and their tributaries have been reserved for Pakistani use, with India’s sovereignty limited to the three smaller rivers of the Indus basin flowing south of J&K: the Beas, Ravi and Sutlej. In effect, the IWT kept for India just 19.48% of the total waters of the six-river Indus system.

Pakistan, by repeatedly invoking the IWT’s conflict-resolution provisions to mount pressure on India, is already undermining the treaty, the world’s most-generous sharing arrangement. Waging water war by such means carries the danger of a boomerang effect.

A balance between rights and obligations is at the heart of how to achieve harmonious, rules-based cooperation between co-riparian states. In the Indus basin, however, Pakistan wants rights without responsibilities: It expects eternal Indian water munificence, even as its military generals export terrorists to India and its civilian government wages a constant propaganda campaign against India’s water “hegemony” and seeks to internationalize every dispute.

The IWT has become an albatross around India’s neck. If India wishes to dissuade Pakistan from continuing with its proxy war, it must link the IWT’s future to Islamabad honouring its anti-terror commitment, or else the treaty collapses. Indeed, a Pakistani senate resolution passed earlier this year, calling for Pakistan to “revisit” the IWT, offers India an opening to renegotiate a more balanced and fair Indus treaty — and, if Pakistan refuses, to stop respecting the terms of the existing pact.

In the absence of an enforcement mechanism in international law, nothing can stop India from emulating Pakistan’s example in not honouring its bilateral commitments.  For example, Pakistan has flouted the Simla treaty’s key terms, including respecting the inviolability of the Line of Control as the essential basis for durable peace.

Guile, dexterity and diligence often can achieve more in international relations than the use of overt force. India can still bring Pakistan to heel without overtly employing force. By employing a mix of military, economic and political tools to squeeze Pakistan, India must wage a silent war to eliminate the threat from a quasi-failed nation that has mocked its patience as cowardice.

Brahma Chellaney is a professor at the Centre for Policy Research.

© Mint, 2016.

Securing the Indus treaty

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Brahma Chellaney, The Hindu, August 5, 2016

edit1Water sharing, transparency and collaboration are the pillars on which the unique Indus Waters Treaty was erected in 1960. Islamabad’s recently unveiled intent to haul India again before an international arbitral tribunal is a testament to how water remains a source of discord for Pakistan despite a treaty that is a colossus among existing water-sharing pacts in the world.

In Asia, the vast majority of the 57 transnational river basins have no water-sharing arrangement or any other cooperative mechanism. India, however, has water-sharing treaties with both the countries located downstream to it, Pakistan and Bangladesh. These treaties govern the subcontinent’s two largest rivers, Indus and Ganges. By contrast, China, despite its unrivalled international status as the source of river flows to more than a dozen countries, stands out for not having a single water-sharing arrangement with any co-riparian state.

Significantly, India’s treaties with Pakistan and Bangladesh are the only pacts in Asia with specific water-sharing formulas on cross-border flows. They also set a new principle in international water law. The 1996 Ganges treaty set a new standard by guaranteeing delivery of specific water quantities in the critical dry season.

India’s Indus largesse

The Indus treaty stands out as the world’s most generous water-sharing arrangement by far, in terms of both the sharing ratio (80.52 per cent of the aggregate water flows in the Indus system reserved for Pakistan) and the total volume of basin waters for the downstream state (Pakistan gets 90 times greater volume of water than Mexico’s share under a 1944 pact with the U.S.). It is the first and only treaty that goes beyond water sharing to partitioning rivers. It drew a virtual line on the map of India to split the Indus Basin into upper and lower parts, limiting India’s full sovereignty rights to the lower section and reserving for Pakistan the upper rivers of Jammu and Kashmir — the so-called “western rivers.”

Today, it remains the only inter-country water agreement in the world embodying the doctrine of restricted sovereignty, which seeks to compel an upriver state to defer to the interests of a downstream state. Treaty curbs, for example, obviate any Indian control over the timing or quantum of the Pakistan-earmarked rivers’ trans-boundary flows.

Given that water is J&K’s main natural resource and essential for economic development, the gifting of its river waters to Pakistan by treaty has fostered popular grievance there. The J&K government in 2011 hired an international consultant to assess the State’s cumulative economic losses, estimated to be hundreds of millions of dollars annually, from the treaty-imposed fetters on water utilisation. Demands in the J&K legislature for revision or abrogation of the Indus treaty are growing since a resolution seeking a treaty review was passed in 2003. The backlash from underdevelopment, made worse by a Pakistan-abetted insurrection, has prompted New Delhi to embark on several modestly sized, run-of-the-river hydropower projects in J&K to address chronic electricity shortages.

Pakistan’s obstructionist tactics

Run-of-the-river projects are permitted by the Indus treaty within defined limits. But Pakistan wants no Indian works on the three “western rivers” and seeks international intercession by invoking the treaty’s dispute-settlement provisions, which permit a neutral-expert assessment or the constitution of a seven-member arbitral tribunal. By aiming to deny J&K the limited benefits permissible under the treaty, Pakistan wishes to further its strategy to foment discontent and violence there.

This Pakistani strategy was exemplified in 2010 when it instituted international arbitration proceedings over India’s 330-megawatt hydropower project on a small Indus tributary, the Kishenganga (known as Neelum in Pakistan). It persuaded the arbitral tribunal in 2011 to order India to suspend work on the project. With Indian work suspended, Pakistan ramped up construction of its own three-times-larger, Chinese-aided hydropower plant on the same river so as to stake a priority right on river-water use.

The tribunal’s final ruling in late 2013 represented a setback for India. It allowed India to resume work on the Kishenganga project but with a stiff condition that India ensure a minimum flow of 9 cumecs of water for Pakistan. Prescribing such a minimum flow went beyond the treaty’s terms and the laws of nature.

More importantly, the arbitrators separately delivered a general prohibition against drawdown flushing in all new Indian hydropower projects. In a 2007 decision on the earlier Baglihar case instituted by Pakistan, an international neutral expert held that gated spillways to help flush out silt were consistent with the treaty’s provisions. Yet the arbitrators, disregarding the Baglihar decision and the common international practice of constructing spillway outlets to control silt build-up, issued a prohibition that potentially affects the commercial viability of all future run-of-the-river projects in J&K.

Pakistan’s move to institute new arbitration proceedings over the Kishenganga and Ratle projects is a fresh reminder as to how India’s unparalleled water generosity has engendered unending trouble for it. In 1960, India thought it was trading water for peace by signing the treaty. Within five years of the treaty’s entry into force, Pakistan launched a war to grab the Indian part of J&K in 1965.

Today, Pakistan’s water relationship with India is becoming murkier due to China’s construction of dams in Pakistan-held Kashmir. While railing against India’s small-sized projects, Pakistan is pursuing mega-dams, such as the 7,000-megawatt Bunji Dam and the 4,500-megawatt Bhasha Dam. By way of comparison, the biggest dam India has built since Independence is the 2,000-megawatt Tehri project in Uttarakhand.

Onus on Islamabad

What China did recently — publicly trash an arbitral tribunal ruling that found it has no legal or historical basis to claim most of the South China Sea — was not an isolated case: major powers rarely go for international arbitration or accept arbitral tribunal awards.

Pakistan, by waging a constant propaganda battle against India on the waters issue, risks undermining the Indus treaty. And by repeatedly invoking the treaty’s conflict-resolution provisions to bring on international intercession, it risks sending the wrong message to India — that compliance with treaty obligations and arbitration decisions is counterproductive. In the absence of an enforcement mechanism in international law, nothing can stop India from emulating the example of the major powers.

Pakistan insists on rights without responsibilities. In fact, its use of state-reared terrorist groups can be invoked by India, under Article 62 of the Vienna Convention on the Law of Treaties, as constituting reasonable grounds for withdrawal from the Indus treaty. The International Court of Justice has upheld the principle that a treaty may be dissolved by reason of a fundamental change of circumstances.

If Pakistan wishes to preserve the Indus treaty, despite its diminishing returns for India, it will have to strike a balance between its right to keep utilising the bulk of the river system’s waters and a corresponding obligation (enshrined in international law) not to cause “palpable harm” to its co-riparian state by exporting terror.

Brahma Chellaney, the author of Water, Peace, and War: Confronting the Global Water Crisis and Water: Asia’s New Battleground, is with the Centre for Policy Research.

Mirage of a rules-based order

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BY BRAHMA CHELLANEY, The Japan Times, July 26, 2016

downloadIs the world governed by international law? The attitudes of the world’s two demographic titans, China and India, on international law are a study in contrast, underscoring that compliance with or defiance of rules is often driven by power dynamics and state character.

Consider China’s brazen refusal to respect the recent, legally binding ruling of an international arbitral tribunal that knocked the bottom out of its expansive claims in the South China Sea. Beijing has poured scorn on the ruling, calling it “a farce” and “naturally null and void,” and saying it deserved to be “dumped in garbage.” The choice insults belie China’s loss of face internationally.

Yet, to bring Beijing to heel, there is little that the international community can do — other than punitively restrict imports from China, which no country is willing to do.

China’s open disdain for the verdict stands in sharp contrast with India’s ready acceptance of adverse rulings by international arbitral tribunals between 2013 and 2016 in three separate cases.

One case, initiated by Bangladesh, involved a maritime boundary dispute in the Bay of Bengal. A second case, instituted by Pakistan, related to the Indus Waters Treaty and centered on its challenge to India’s small, 330-megawatt Kishenganga hydropower plant. The third case was filed by Italy over India’s initiation of criminal proceedings against two Italian marines, who were arrested in 2012 for allegedly killing two unarmed Indian fishermen by opening fire from their oil tanker, less than 21 nautical miles off the Indian coast.

In all the three cases against India, the tribunals — just like the tribunal in the South China Sea case against China that was filed by the Philippines — were established under the Permanent Court of Arbitration at The Hague.

India, despite apparent flaws in the rulings, deferentially agreed to comply with the verdicts, thereby underscoring that it lacks China’s power and political will to stage any act of defiance.

Take the Bay of Bengal case, which went largely in Bangladesh’s favor. The arbitral tribunal, in its July 2014 decision, delimited the two countries’ territorial sea, exclusive economic zone and continental shelf, including the area beyond the EEZ of 200 nm. This case ranked as one of the first two in which the extended continental shelf beyond 200 nm was delimited by an arbitral tribunal without waiting for the essential recommendations from the Commission on the Limits of the Continental Shelf (CLCS), which was established under the United Nations Convention on the Law of the Sea (UNCLOS) to define the outer limits of nations’ seabed territory.

In delimiting the boundary between Bangladesh and India, the five-member tribunal left a sizable “gray zone,” which lies beyond Bangladesh’s limit of 200 nautical miles. The gray zone was one of the reasons the delimitation decision was not unanimous. The dissenting arbitrator found the majority’s reasoning unsatisfactory and its delimitation decision arbitrary.

Indeed, two distinct gray areas have emerged in the Bay of Bengal — one where Indian and Bangladeshi territorial control overlaps, and the other with overlapping claims of India, Bangladesh and Myanmar. This is because the gray zone that resulted from the final delimitation line between India and Bangladesh partially overlaps a gray area that emerged from another tribunal’s earlier delimitation of the Myanmar-Bangladesh line in 2012.

Such gray areas are zones of potential conflict. Yet India — which voluntarily went for arbitration, something major powers rarely do — promptly welcomed the ruling, which awarded Bangladesh more than three-quarters of the 25,602-sq.-km disputed territory. The tribunal actually went beyond established jurisprudence to uphold Bangladesh’s contention that the concavity of its coastline necessitated “special circumstances” in the application of UNCLOS to the determination of its maritime boundaries.

Now consider the Indus ruling, delivered in late 2013: The verdict went beyond Pakistan’s challenge to the Kishenganga project (which was allowed to proceed with conditions); the tribunal delivered a general prohibition against drawdown flushing in all new Indian hydropower projects. This potentially affects the economic viability of all future Indian projects on the Indus River and its tributaries in Indian-administered Kashmir: Without the use of drawdown flushing, silt would build up in a project, undermining its sustainability.

The paradox is that the 1960 Indus Waters Treaty remains by far the world’s most generous water-sharing pact, under which India has reserved over 80 percent of the basin waters for its regional adversary. Yet Pakistan has waged a constant battle to keep India on the defensive on the waters issue, including through propaganda and by invoking the treaty’s conflict-resolution procedures, which allow international arbitration or neutral-expert assessment.

Had China been in India’s place, would it have put up with this? It would likely have dumped the treaty itself.

In fact, India’s unparalleled water generosity to Pakistan has invited unending trouble. Within five years of the Indus treaty’s entry into force, Pakistan launched a major war against India to grab the remaining part of the divided Kashmir in 1965, at a time when India had still not recovered from its humiliating rout in the 1962 war with China. Today, Pakistan expects eternal Indian munificence on water even as its military generals export terror across the border to India and Afghanistan.

The case initiated by Italy, for its part, is odd. Long before Italy filed the case, a considerate India had allowed one of the two accused marines to return to Italy in 2014 after he suffered a stroke. India also permitted the other marine to stay in the Italian ambassador’s residence in New Delhi rather than be in jail. In fact, the high court in the state of Kerala allowed the two, after their arrest, to go to Italy for Christmas in 2012.

The issue currently before the five-member tribunal is whether India, under UNCLOS, has penal jurisdiction over the marines for the double murder in its EEZ. The arbitrators, however, have no power to dictate bail conditions for the accused.

However, the tribunal, in an unusual “provisional measures”  order delivered in April this year over India’s objections, stated: “Italy and India shall cooperate, including in proceedings before the Supreme Court of India, to achieve a relaxation of the bail conditions of Sgt. Girone (the second marine) so as to give effect to the concept of considerations of humanity, so that Girone, while remaining under the authority of the Supreme Court of India, may return to Italy during the present (UNCLOS) Annex VII arbitration.”

This was not a directive to let Girone return to Italy but an instruction to both sides to cooperate over a possible further relaxation of his bail conditions so that he “may” go home. Yet, with Italy blocking India’s entry into the Missile Technology Control Regime (MTCR) to secure the return of the remaining marine, the Indian government promptly asked its Supreme Court to let Girone go to Italy, and he was allowed to return. Had Indian naval officers, instead of Italian marines, been involved in the incident, they would still be rotting in jail.

Italy showed how leverage can be employed in diplomacy even to influence criminal proceedings in another country. It was only after Girone returned home that Italy ended its extended obstruction to India’s MTCR admission.

Contrast Italy’s exercise of leverage with India’s reluctance to link the future of the Indus treaty to the cessation of Pakistan’s war by terror, or to leverage its ballooning imports from China to help improve Chinese behavior.

Pakistan’s use of state-reared terrorist groups against India can possibly be invoked by New Delhi, under Article 62 of the Vienna Convention on the Law of Treaties, as constituting reasonable grounds for its withdrawal from the Indus treaty. Instead, Pakistan has just announced its intention to drag India before an international arbitral tribunal again over a new Indus treaty-related issue that it wishes to litigate.

Unlike India, which has repeatedly been summoned before the international justice system, the South China Sea case marked the first time for China to be hauled up before an international tribunal. China’s dismissal of the ruling in that case shows that it is willing to absorb the cost to its reputation as long as it maintains and expands its hold on territory and resources in the South China Sea.

In a world in which power respects power and money talks louder than words, reputation can be repaired. China, after all, paid no lasting international costs for gobbling up Tibet, or for causing the death of tens of millions of Chinese during the so-called Great Leap Forward and Cultural Revolution, or for carrying out the Tiananmen Square massacre of pro-democracy demonstrators.

Indeed, as if to underscore that nothing succeeds like aggression, no one today is talking about getting China to vacate the seven reefs and rocks that it has turned into nascent military outposts in the South China Sea after massive land reclamation. Rather, the talk is about finding ways to dissuade it from further expansionary activities.

International law is powerful against the powerless, but powerless against the powerful. The five veto-wielding permanent members of the U.N. Security Council serve as prime examples of a unilateralist approach to international relations.

Like China today, the other four permanent members have refused in the past to comply with rulings from international arbitration or adjudication, including on issues relating to UNCLOS, which was at the center of the South China Sea verdict. The United States has not even ratified UNCLOS, and it rejected a 1980 International Court of Justice verdict directing it to pay reparations to Nicaragua for illegally mining its harbors.

Although globalization has fundamentally transformed economics, politics, cultures and communications, the world has remained the same in one basic aspect — the powerful cite international law to other states, demanding compliance, but ignore it when it comes in their own way. The notion of universal compliance with a rules-based order remains an illusion.

Long-time Japan Times contributor Brahma Chellaney, a geostrategist and author of nine books, is a professor of strategic studies at the New Delhi-based Center for Policy Research and a Richard von Weizsacker Fellow of the Robert Bosch Academy in Berlin. His latest book is “Water, Peace, and War: Confronting the Global Water Crisis.”

© The Japan Times, 2016.