Fair Observer talks to Brahma Chellaney

Featured

In this edition of The Interview, Fair Observer talks to Brahma Chellaney, a prominent Indian intellectual and author.

Bordered by the Indian Ocean, the Arabian Sea and the Bay of Bengal, India is the second most populous country and, arguably, the biggest democracy in the world. The World Bank and the International Monetary Fund recognize India as the sixth largest economy on the planet.

Despite significant economic growth in recent decades, India faces its own set of challenges. Poverty in India is still a serious concern, even though the country is no longer home to the largest number of poor people in the world; that country is Nigeria. However, figures show two-thirds of people in India live in poverty.

India’s dynamic foreign policy and the willingness of countries to forge a close partnership with New Delhi as a nascent global power pose a serious challenge to a world order in which the US, Russia, China and the EU are competing for dominance. India’s huge energy demands also mean that oil and gas producers have a difficult job vying with each other and satisfying the needs of the third biggest energy-consuming country in the world.

The efforts of Jawaharlal Nehru, the first prime minister of India who is referred to as the architect of Indian foreign policy, paved the way for the foundation of the Non-Aligned Movement (NAM) in 1961. India is a major member of the NAM and was its president from 1983 until 1986. Today, India maintains the same neutrality in international affairs, but tries to play an active role on the global stage through diversifying its economic partners, engaging in UN peacekeeping missions and keeping an eye on a possible permanent seat in the UN Security Council.

In this edition of The Interview, Fair Observer talks to Brahma Chellaney, a prominent Indian intellectual and author, about India’s foreign policy, its economy and its relations with neighboring countries in South Asia.

The transcript has been edited for clarity.

Kourosh Ziabari: The International Monetary Fund’s World Economic Outlook predicts that India will experience a 7.4% growth in its gross domestic product by 2019 and that the figure would be 7.7% for 2020. How has India achieved such remarkable economic growth that even surpasses the United States and China?

Brahma Chellaney: Ever since India embarked on economic reforms in the early 1990s, its GDP growth has accelerated. Under the government led by Prime Minister Narendra Modi’s predecessor, Manmohan Singh, GDP growth surpassed 8% annually. Critics blame the Modi government’s missteps, including demonetization of high-value currency notes and a hastily introduced goods and services tax, for slowing the economic growth. However, the government’s tax and regulatory reforms, despite inflicting short-term pain, will likely help accelerate GDP growth in the medium to long-term.

India, however, needs to invest greater resources in education, human resources development and achieving autonomous technological capabilities in order to sustain economic growth in the years ahead.

Ziabari: International reports show that the number of ceasefire violations along the India-Pakistan border have increased significantly in 2017 and 2018. Do you think tensions will be alleviated between the two countries in the New Year, especially since the new Pakistani PM Imran Khan seems to be determined to make peace with India?

Chellaney: Pakistan has turned into the mecca of terrorism, even as its new leader promises a medina-like welfare state. In Pakistan, no prime minister has been allowed to complete a full five-year term. When a prime minister falls foul of the deep state, a bendable judiciary, opposition and bureaucracy are used to smear the leader’s reputation and oust him or her. Every prime minister has been thrown out on charges of corruption and incompetence.

The latest military-engineered election has changed little in Pakistan, a country still struggling to be at peace with itself. The Pakistani military will remain the puppet master calling the shots from behind the scenes, with Imran Khan as its newest puppet. Khan is a supporter of the military-backed jihadists and Islamists and a religious zealot himself.

Today, caught in mounting debt to China, Pakistan is in desperate need for an international bailout package. Against this background, Pakistan will remain a principal source of regional instability and the fountainhead of transnational terrorism. Its neighbors, including India and Afghanistan, can expect little change in Pakistan’s behavior.

Ziabari: How do you think the US and European Union’s sanctions on Russia will impact India’s economy? Do you think there will be a problem in Russia’s delivery of the S-400 air defense system to India as a result of US sanctions that make the payments difficult?

Chellaney: A generation after the Cold War ended, the Washington power elites remain obsessively fixated on Russia, although Russia’s economy today is just one-tenth the size of China’s and its military spending one-fifth of China.

Pressure from the power elites has led the Trump administration to impose at least four rounds of sanctions on Russia this year, even though better relations with Moscow can help to put discreet checks on China’s overweening ambitions. With its vast economic and military potential, China clearly represents the main threat to US interests. But the current US sanctions-centered approach to Russia has only compelled Moscow to pivot to China.

The US sanctions policy toward Russia also has gratuitously introduced a major irritant in relations with India. A new Russia-centered sanctions law took effect earlier this year. Known as Countering America’s Adversaries Through Sanctions Act, or CAATSA, the law uses the sanctions threat to wean countries off their craving for Russian weapons, so as to boost America’s own arms sales.

The US has already overtaken Russia as the top arms seller to India. Yet it is seeking to pressure India to reduce its imports of Russian arms. India cannot snap its defense ties with Moscow. With India going ahead with a deal to buy the interceptor-based S-400 Triumf air and anti-missile defense system from Russia, the US Congress has passed a waiver legislation that grants India conditional waiver from the CAATSA sanctions.

Ziabari: Iran is the second largest supplier of India’s oil. Will the new US sanctions against Iran affect the oil trade between Tehran and New Delhi? Is India legally bound to follow the US lead in sanctioning Iran and cutting off crude imports from that country?

Chellaney: India, the second-largest importer of Iranian oil after China, is a major victim of the new US sanctions against Iran and Russia. By implicitly mounting two-pronged pressure on New Delhi on energy and defense fronts, Washington has implicitly underscored the risks for India of pursuing a foreign policy too closely aligned with America. By slapping a nation with punitive sanctions, the US seeks to block trade and financial activities with that country even by other states.

Such extraterritorial sanctions — which it euphemistically labels “secondary” sanctions — run counter to international law. Yet the US uses its unmatched power to turn national actions into global measures. As the world’s reserve currency that greases the wheels of the global financial system, the US dollar arms America with tremendous leverage, making US sanctions the most powerful in the world. Most international transactions, from banking to oil, are conducted in US dollars. Through its Iran-related sanctions, the US wants to influence the energy-import policy of India, which currently imports more than three-fourths of its crude oil requirements.

Washington is seeking to sell more oil and gas to India and also encouraging it to switch imports from Iran to Saudi Arabia and other US allies. Iran, however, has long been a major oil supplier to India. It will remain important for India’s energy-import diversification strategy. The US has granted India a six-month waiver from its Iran-related oil sanctions. In addition, the US has granted a waiver for India’s Pakistan-bypassing transportation corridor to Afghanistan via Iran. India is investing in modernizing the Chabahar Port.

Ziabari: In one of your articles, you praised President Donald Trump for trying to contain China and hold back its economic and political growth. However, many observers say that Trump is not a reliable politician and does not take advice from the right people. Do you think his lack of political experience will be a threat to India as well?

Chellaney: Any US administration’s policies are made not just by the president, but by the whole team the president has assembled. Washington is more polarized and divided than ever before. Yet it is highly significant that, in this environment, a bipartisan consensus has emerged that the decades-old US policy of “constructive engagement” with China has failed and must be replaced with active and concrete counteraction. The China policy change that is underway, therefore, will likely outlast the Trump presidency because it will be difficult for a successor to reverse it and go back to trustful cooperation.

The policy change does not seek to hold back China’s economic and political growth. Rather the aim is to make China comply with international rules and norms. For example, China has long been cheating on World Trade Organization rules. It is important to note that, despite the policy change that is underway, China still gets a free pass on human-rights abuses — from holding a million or more Muslims from Xinjiang province in internment camps to carrying out the forced disappearance of the Interpol chief. Had Russia set up such internment camps, the US response would likely have been swift and resolute.

Ziabari: You once wrote that the President Trump has tried to “sweet-talk autocratic leaders,” such as North Korea’s Kim Jong-un and Russia’s Vladimir Putin, to encourage them to make concessions. Why didn’t he try this option with Iran? Has his flattering of the North Korean and Russian leaders paid off?

Chellaney: Trump lavishes praise on autocratic foreign leaders that he is seeking to extract concessions from. Even more than Kim and Putin, Trump has lavished praise on China’s Xi Jinping, calling him “terrific” and “great.” In fact, Trump has flattered no foreign leader like Xi. Yet Trump has managed so far to wrest no major concessions from Xi. This explains why the Trump administration has targeted China with tariffs on $250 billion worth of imports into the US from there. As for Kim, Trump has succeeded in getting North Korea to declare a moratorium on nuclear and missile testing. But Kim is unlikely to give up his nuclear weapons entirely. That is the only card he has.

Trump’s Iran policy is short-sighted and counterproductive to US interests. His Iran policy has been greatly influenced by neoconservatives, election campaign donors and other interests tied to Israel. This explains why Trump has pursued a hardline approach toward Iran.

Ziabari: There are indications that India is forfeiting its democratic values. India’s top court recently ruled that movie theaters should be required to play India’s national anthem before screening movies. The country ranks 140th out of 179 in Reporters Without Borders’ Press Freedom Index. It is 136th out of 163 countries in the Global Peace Index 2018. Restrictions on Muslim Indians continue to remain in place. Do you think India is still a serious democracy?

Chellaney: You must be kidding that there are “restrictions” on Muslims in India. Muslims have the same rights as Hindus, Buddhists, Christians and others in India. Discrimination on the basis of religion is unlawful under the Indian Constitution.

India’s democracy certainly faces challenges. But it is widely recognized that India remains a robust and proud democracy. In fact, it is the world’s largest democracy. The Indian media is one of the freest in the world. And Indian courts regularly overturn government decisions. If anything, India has an activist judiciary that often appears to encroach on the executive branch’s powers.

In fact, democracy remains India’s greatest asset. While the concepts of democratic freedoms and the rule of law are normally associated with the West, India can claim ancient traditions bestowing respect to such values. Basic freedoms for all formed the linchpin of the rule in third century BC of Emperor Ashoka who, as Nobel laureate Amartya Sen has pointed out, “did not exclude women and slaves as Aristotle did.”

Ziabari: What are the foreign policy priorities of India as of today? What is India doing to in order to consolidate its international standing and fulfill its economic aspirations?

Chellaney: India has long cherished “strategic autonomy” and sought to stay clear of formal alliances. That won’t change. However, in an important shift, India is moving from nonalignment to multi-alignment. This means India is going from its long-held nonalignment to a contemporary, globalized practicality.

There is an important difference between nonalignment and multi-alignment. Nonalignment implies a passive stance as a bystander. Multi-alignment, by contrast, permits an active and participatory role, including building close strategic partnerships with likeminded powers.

India cannot, and will not, be a lackey of any power. Because of its geographical location, India is the natural bridge between the West and the East, and between Europe and Asia. Through forward thinking and a dynamic foreign policy, India is seeking to truly play the role of a bridge between the East and the West, including serving as a link between the competing demands of the developed and developing worlds. At a time of heightened geopolitical tensions, the world needs such a bridge-builder.

Ziabari: Prime Minister Narendra Modi visited Rwanda and Uganda earlier this year before traveling to South Africa for the BRICS summit. Historically, there have been large Indian communities across Africa that contributed to the economic prosperity of the continent. What is India looking for in rejuvenating its relations with African nations?

Chellaney: India has had close historical ties with Africa. Today, India is seeking to revive those ties. Take the Indian Ocean region, which extends from Australia to eastern and southern Africa. The Indian Ocean region has emerged as the world’s major energy and trade seaway, as well as the center of the challenges of the 21st-century world — from terrorism and extremism to piracy and safety of sea-lanes of communication.

India is attempting to build a web of strategic partnerships with key littoral states in the Indian Ocean rim. The partnerships incorporate trade accords, defense and energy cooperation, and strategic dialogue. India’s focus includes countries adjacent to chokepoints such as the Strait of Hormuz, Iran; the Strait of Malacca, namely Singapore, Indonesia and Malaysia; the Bab el-Mandab, which are Djibouti and Eritrea; and the Cape of Good Hope and the Mozambique Channel, namely South Africa and Mozambique.

Not only does BRICS include South Africa, but also South Africa’s president will be the chief guest at India’s Republic Day parade on January 26, 2019. India and Japan have launched the Asia-Africa Growth Corridor in partnership with a number of African countries. In addition, India has offered a $1 billion line of credit to African countries.

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

Advertisements

A Concert of Indo-Pacific Democracies

Featured

8f1f3fb6-dda2-11e8-bb7b-3484094c71b9_1320x770_223539

The deepening relationship between Japan and India serves the goal of forestalling the emergence of a China-centric Asia. If they can leverage their relationship to generate progress toward broader cooperation among the region’s democracies, the vision of a free and open Indo-Pacific may be achievable.

BRAHMA CHELLANEY, a column internationally syndicated by Project Syndicate

On his week-long tour of Asia, US Vice President Mike Pence has been promoting a vision of a “free and open” Indo-Pacific region, characterized by unimpeded trade flows, freedom of navigation, and respect for the rule of law, national sovereignty, and existing frontiers. The question is whether this vision of an Indo-Pacific free of “authoritarianism and aggression” is achievable.

One country that seems willing to contribute to realizing this vision is Japan. In fact, Japanese Prime Minister Shinzo Abe is the originator of the “free and open Indo-Pacific” concept that lies at the heart of President Donald Trump’s new strategy, the successor to Barack Obama’s  “pivot” to Asia.

Having historically punched above its weight internationally, Japan is responding to China’s muscular rise by strengthening its own position in the region. Taking advantage of its considerable assets – the world’s third-largest economy, substantial high-tech skills, and a military that has recently been freed of some legal and constitutional constraints – Japan is boosting its geopolitical clout.

Japan’s world-class navy has already begun operating far beyond the country’s waters in order to establish its position in the region. For example, in order to challenge China’s claims in the South China Sea, a Japanese submarine and three destroyers carried out naval drills there in September. “Japan’s willingness to participate in Asian security,” former US Defense Secretary Ash Carter recently said, “makes it an increasingly important player in the region.”

But creating a free and open Indo-Pacific is not the job of one country alone. Establishing the stable balance of power needed to realize Pence’s vision will require all of the region’s major democracies – from Japan and India to Indonesia and Australia – to come together.

The good news is that Abe seems to recognize the importance of cooperation among Asia’s democratic powers. For example, in discussing the natural alliance between the region’s richest democracy and its largest one, he declared: “A strong India benefits Japan, and a strong Japan benefits India.”

With that in mind, Abe and his Indian counterpart, Narendra Modi, recently held a summit that opened the way for a military logistics pact that would give each country’s armed forces access to the other’s bases. Beyond instituting a joint “two plus two” dialogue among the countries’ foreign and defense ministers, Abe and Modi agreed to deepen naval and maritime-security cooperation and collaborate on projects in third countries, including Myanmar, Bangladesh, and Sri Lanka, to enhance strategic connectivity in the Indo-Pacific.

At the summit, Japan and India devised a new motto for the bilateral relationship: “Shared security, shared prosperity, and shared destiny.” The comfort and camaraderie shown by Abe and Modi during their meeting, held at Abe’s private vacation home near Mount Fuji, stood in stark contrast to the stony expressions and somber handshakes on display when, just two days earlier, Abe had met Chinese President Xi Jinping in Beijing.

Cooperation between India and Japan builds on, among other things, the trilateral India-Japan-US “Malabar” naval exercises. Malabar has become an important component of the effort to defend freedom of navigation and overflight in the Indo-Pacific region, through which two-thirds of global trade travels. If India signed a military logistics agreement with Japan, as it has with the US, the Indian navy would be better able to expand its footprint to the western Pacific, while enabling Japan to project its naval power in the Indian Ocean.

Fortunately, relations among the Indo-Pacific’s four key maritime democracies – Australia, India, Japan, and the US – are stronger than ever, characterized by high-level linkages and intelligence-sharing. These countries should institutionalize their “quad” initiative, with the India-Japan dyad forming the cornerstone of efforts to pursue wider collaboration in the region.

But such collaboration will face considerable obstacles. For starters, the relationship between Japan and America’s other closest East Asian ally, South Korea, continues to be  by history.

The issue of “comfort women,” Korean women who were coerced into providing sexual services to Japanese troops during World War II, has long been particularly contentious. A 2015 agreement, endorsed by Abe and former South Korean President Park Geun-hye, claimed to resolve the issue “irreversibly”: Japan offered its apology and one billion yen ($8.8 million) for a fund created to help the victims.

But, earlier this year, Park’s successor, Moon Jae-in, rejected the deal, arguing that it did not adequately serve the victims or the public. More recently, South Korea’s Supreme Court ordered a major Japanese steelmaker to compensate the “victims of forced labor” during Japan’s colonial rule of Korea, even though a 1965 bilateral agreement was supposed to have settled “completely and finally” all such claims.

The rancorous relationship between Japan and South Korea plays directly into China’s hands. While South Korea obviously should not disregard its history, it should find a way to move past its colonial subjugation and form new, mutually beneficial relationships with Japan, much as India, Taiwan, the Philippines, and Indonesia have done with their former colonizers.

Another potential impediment to a concert of Indo-Pacific democracies is domestic instability in key countries. In strategically located Sri Lanka, for example, President Maithripala Sirisena has ousted Prime Minister Ranil Wickremesinghe (despite the latter’s parliamentary majority) and called a snap election, even though the constitution does not give him the power to do either. A weakening of the country’s democracy could have strategic ramifications for an economically integrated but politically divided Indo-Pacific.

Nonetheless, the deepening relationship between Japan and India serves the goal of forestalling the emergence of a China-centric Asia. If Japan and India – after China, the region’s most influential countries – can leverage their relationship to generate progress toward a broader concert of democracies in the region, the vision of a free and open Indo-Pacific may be achievable after all.

© Project Syndicate, 2018.

Belt and Roadblocks

Featured

India’s stance vindicated as China’s grandiose BRI plans run into resistance

Brahma Chellaney, The Times of India

345a

Sierra Leone has become the latest country to scrap a Belt and Road (BRI) project, cancelling a $318-million airport deal with China. After smooth sailing, the BRI is now encountering strong headwinds, as partner-nations worry about sovereignty-eroding debt traps. In multiple countries, BRI projects are being scrapped or scaled back.

India was the first country to come out against the opaque BRI, Chinese President Xi Jinping’s marquee initiative. India boycotted Xi’s much-hyped BRI summit, held to drum up global support for his initiative. The May 2017 summit in Beijing attracted 29 heads of state or government, including Russia’s Vladimir Putin and Turkey’s Recep Tayyip Erdoğan. But, while the US sent a joint secretary-equivalent official to the summit, India sent no one.

Indeed, India publicly portrayed BRI as a non-transparent, neocolonial enterprise aimed at ensnaring smaller, cash-strapped states in a debt trap to help advance China’s geopolitical agenda. An official Indian statement before the BRI summit declared that “connectivity initiatives must be based on universally recognized international norms, good governance, the rule of law, openness, transparency and equality” and that they must also “follow principles of financial responsibility to avoid projects that would create unsustainable debt burden”.

Some commentators in India were quick to claim that, through its summit boycott, India had isolated itself. They also predicted that India would come out a loser by turning its back on what they saw as a promising infrastructure-building initiative that New Delhi too should have tapped.

But at the BRI summit itself, India received implicit support. The European Union openly echoed India’s concerns by saying the BRI did not include commitments to transparency and social and environmental sustainability. The EU’s refusal to back Xi’s BRI-related trade statement marred the summit.

Before long, the US began depicting the BRI as the dawn of a new colonial era. Then US Secretary of State Rex Tillerson called China a “new imperialist power” whose practices are “reminiscent of European colonialism”.

The word “predatory” is now being used internationally about China’s practices. The International Monetary Fund has warned that Chinese loans are promoting unsustainable debt burdens. The price such burdens exact can extend to national sovereignty and self-respect. The handover of Hambantota port on a 99-year lease to China was seen in Sri Lanka as the equivalent of a heavily indebted farmer giving away his daughter to the cruel money lender.

Beijing has leveraged big credits to gain even military presence, as its first overseas naval base at Djibouti illustrates. Trapped in a debt crisis after borrowing billions of dollars, Djibouti was left with no choice but to lease land for the base to China for $20 million in annual rent. China is similarly seeking to employ its leverage over cash-strapped Pakistan to build a naval base next to Gwadar port.

In the Maldives, China has acquired several islets in that heavily indebted Indian Ocean archipelago. While the terms of the various lease agreements have not been disclosed, the acquisitions have come cheap; for example, China paid just $4 million for Feydhoo Finolhu, an island that previously served as a police training centre.

However, China’s grandiose BRI plans are running into broader resistance. Malaysian Prime Minister Mahathir Mohamad, with Chinese Premier Li Keqiang by his side in Beijing’s Great Hall of the People, recently criticized China’s use of infrastructure projects to spread its influence. By warning China against “a new version of colonialism”, Mahathir highlighted international concerns over Beijing’s use of geo-economic tools to achieve geopolitical objectives.

Sri Lanka’s experience has been a wake-up call for other countries with outsize debts to China. A number of BRI partner-states have begun trying to renegotiate their deals with Beijing. Some have decided to cancel or scale back projects. Mahathir, during his Beijing visit, announced the cancellation of Chinese projects worth nearly $23 billion. And China’s close ally, Pakistan, has downsized its main BRI railroad project by $2 billion.

The BRI seeks to export China’s model of top-down, debt-driven development through government-to-government deals clinched without competitive bidding. But, increasingly, the BRI is being seen internationally as an attempt to remake global commerce on China’s terms and project Chinese power far and wide.

Vulnerable countries are awakening to the risks of accepting loans that are too good to be true and then slipping into debt entrapment. China is even replicating some of the practices that were used against it during the European-colonial period, such as the concept of a 99-year lease. The BRI, by creating a mountain of debt, risks undermining China’s international standing, including engendering hidden hostility. A broader pushback against China’s mercantilist practices is already emerging.

Against this background, India’s brave, principled stand against the BRI stands fully vindicated. India can pride itself as the intellectual leader that helped shine a spotlight on the BRI’s financial and security risks and thereby moulded the international debate. The larger international pushback against China’s predatory practices is likely to intensify in the coming years, putting greater pressure on the BRI.

The writer is a geostrategist.

© The Times of India, 2018.

The End of America’s China Fantasy

Featured

Over the last couple of years, the China-policy debate in the US has begun to reflect more realism, with a growing number of voices recognizing China’s ambition to supplant its American benefactor as the leading global superpower. But is it too late to rein in America’s main geopolitical rival?

283f0c5841fac1940b45021cadf003d1.2-1-super.1

BRAHMA CHELLANEY, a column internationally syndicated by Project Syndicate

A long-overdue shift in America’s China policy is underway. After decades of “constructive engagement” – an approach that has facilitated China’s rise, even as the country has violated international rules and norms – the United States is now seeking active and concrete counter-measures. But is it too late to rein in a country that has emerged, with US help, as America’s main geopolitical rival?

From Richard Nixon to Barack Obama, successive US presidents regarded aiding China’s economic rise as a matter of national interest; indeed, Jimmy Carter once issued a presidential memo declaring as much. Even as China defied world trade rules, forced companies to share their intellectual property, and flexed its military muscles, the US held onto the naive hope that, as China became increasingly prosperous, it would naturally pursue economic and even political liberalization.

America’s “China fantasy,” as James Mann calls it, was exemplified by Bill Clinton’s argument in favor of allowing China’s admission to the World Trade Organization. Citing Woodrow Wilson’s vision of “free markets, free elections, and free peoples,” Clinton declared that China’s WTO entry would herald “a future of greater openness and freedom for the people of China.”

That is not what happened. Instead, China established itself at the center of global manufacturing value chains, as countless companies moved their production to the country – including from the US – while keeping its markets, politics, and people under tight control. In fact, China’s dictatorship has become even more entrenched in recent years, as the Communist Party of China has used digital technologies to build a surveillance state. Meanwhile, the US has run up trillions of dollars in bilateral trade deficits.

Nonetheless, America’s China fantasy endured, leading Obama to look on as the country created and militarized artificial islands in the South China Sea. At the height of the Chinese government’s island-building, Obama argued that “we have more to fear from a weakened, threatened China than a successful, rising China.” As a result, China seized de facto control of a highly strategic sea corridor through which one-third of global maritime trade passes – all without incurring any international costs.

Over the last couple of years, however, the China-policy debate in the US has begun to reflect more realism, with a growing number of voices recognizing China’s ambition to supplant its American benefactor as the leading global superpower. The US finally called China what it is: a “revisionist power” and “strategic competitor.” And, just this month, Vice President Mike Pence bluntly accused China of “using political, economic, and military tools, as well as propaganda, to advance its influence and benefit its interests” in the US.

This rhetorical shift is being translated into action. President Donald Trump’s trade war, in particular, has grabbed headlines, though many observers have failed to discern the strategy behind the tariffs.

Whereas Trump has used tariffs against allies as leverage to secure concessions and clinch new trade deals, US tariffs targeting China – which could endure for years – are intended to bring about more fundamental and far-reaching change. Even the revised deals with US allies are intended partly to isolate China, thereby forcing it to abandon its mercantilist trade practices, such as forced technology transfer.

But what the Trump administration has initiated goes beyond tariffs; it amounts to a structural change in America’s China policy that promises to reshape global geopolitics and trade. Because this change aligns with an incipient US bipartisan consensus in favor of more assertive action to constrain China, it is likely to outlast Trump’s presidency.

To be sure, this does not mean that the US is going to adopt an overtly confrontational China policy. Nor does it necessarily mean that, as many , a new cold war is in the offing. For example, China still gets a free pass on human-rights abuses, from holding up to a million Muslims from Xinjiang province in internment camps to effectively kidnapping Interpol President Meng Hongwei. And, despite his assertions that the Obama administration’s response to China’s activities in the South China Sea was “impotent,” Trump has done little to counter Chinese expansionism.

Instead, the US seems to hope that it can use primarily economic levers to weaken China – a kind of death from a thousand cuts. But will it be enough? Or is the US effectively shutting the stable door after the horse has bolted?

China is already challenging the US for technological and geopolitical primacy, and flaunting its authoritarian capitalism as an alternative to democracy. Communism couldn’t pose a credible challenge to liberal democracy, but authoritarian capitalism might. In that sense, China’s model represents the first major challenge to liberal democracy since the rise of Nazism.

Thanks to its great strides in strengthening its technological prowess and geopolitical clout, China is in a strong position to withstand US pressure to change its ways. It will have to sacrifice some economic growth. But for President Xi Jinping, such a sacrifice would be worth it, if it meant protecting not only his own position, but also his “Chinese dream” of global preeminence. Even if US pressure escalates significantly, China will likely adopt a “two steps forward, one step back” strategy to keep progressing toward its ambitious goals.

This is not to say that US efforts are for naught. On the contrary, its policy shift amounts to its last chance to stop China before it secures the critical technologies it needs to gain the upper hand geopolitically in Asia and beyond. Even if it is too late to force China to respect international rules and human rights, it is never too soon to end China’s damaging free ride.

© Project Syndicate, 2018.

Why Mike Pence is playing bad cop against China

Featured

As the trade war escalates, Donald Trump is seeking to preserve space for a possible deal and leaving his deputy to tackle the tough questions.

SPACE-FORCE

Brahma Chellaney, The National

After a landmark speech this month at the Hudson Institute, which signalled a fundamental shift in America’s China policy, Vice President Mike Pence will lead a US delegation to three important multilateral summits in November. While President Donald Trump has lavished praise on China’s President Xi Jinping despite their escalating trade war, Pence is leading the administration’s charge against China.

Mr Trump and Mr Pence might, in fact, be playing a deliberate game of good cop, bad cop.

Mr Trump’s handling of China reflects his reluctance to antagonize Mr Xi or impose sanctions on China even in response to egregious human-rights abuses, including its internment of up to one million Muslims from Xinjiang. Had Russia set up such camps, the US response would likely have been swift and resolute.

The US president is a great believer in the idea that a good rapport between heads of government can significantly shape the relationship between the countries they lead. He also prides himself on being a great negotiator and deal-maker.

While letting his vice president forthrightly articulate America’s concerns over China, Mr Trump is seeking to preserve space to cut a possible deal with Mr Xi on trade. Mr Trump and Mr Xi, in their first face-to-face interaction in nearly a year, are likely to meet on November 29 in Buenos Aires, a day before the G20 summit opens there.

In his recent speech, Mr Pence highlighted how China is blending economic aggression, territorial and maritime revisionism, military adventurism, influence operations and Orwellian repression at home to advance its ambitions.

More importantly, Mr Pence declared that “the US has adopted a new approach to China”, saying that “previous administrations all but ignored China’s actions. And in many cases, they abetted them. But those days are over.”

The speech laid out why the Trump administration is making a course correction in the China policy that successive American presidents have pursued since the early 1970s, when the US managed the diplomatic coup of splitting its two main enemies – the Soviet Union and China. With the US winning over China to its side, it became two against one. This proved a critical factor in the eventual US victory in the Cold War and the Soviet Union’s collapse.

In return, the US actively aided China’s rise. After Deng Xiaoping emerged as China’s paramount leader in 1978, following a fierce power struggle, and embarked on economic modernisation, the US lent full support to his mission.

The US policy of assisting China’s economic ascent did not change even in response to the 1989 Tiananmen Square massacre. There, Chinese authorities used tanks to ruthlessly crush student-led protests in the heart of Beijing – an action that left hundreds, possibly thousands, dead.

But now the Trump administration has unveiled a new strategy to shift the US relationship with China from co-operation to competition, including confronting Chinese mercantilism and Beijing’s campaign of influence operations on American soil.

As Mr Pence put it, the US miscalculated that after the fall of the Soviet Union, “a free China was inevitable”. Today, according to him, an increasingly authoritarian and aggressive China has “mobilised covert actors, front groups, and propaganda outlets to shift Americans’ perception of Chinese policy … what the Russians are doing pales in comparison to what China is doing across this country”.

Against this backdrop, it might seem appropriate that Mr Trump is sending the blunt-speaking Mr Pence in his place to the forthcoming multilateral summits in the Indo-Pacific region − the East Asia Summit (EAS) and the US-Asean summit, both to be held in Singapore in mid-November, followed by the Asia Pacific Economic Cooperation (APEC) group summit at Port Moresby, Papua New Guinea, on November 17-18.

APEC summits, instituted in 1993, have become largely symbolic, and Mr Trump’s absence at Port Moresby will not be unusual. Bill Clinton missed two summits and Barack Obama skipped one. As APEC’s membership has expanded, the grouping’s cohesiveness and mission have weakened.

The promise of the 18-nation EAS has also faded. Like the 21-nation APEC, the EAS includes America’s main geopolitical rivals, China and Russia.

In this light, to counter the rise of an increasingly muscular China that refuses to play by international rules, substance matters more for US policy than group photographs at multilateral summits.

It is significant that, in an otherwise polarised and divided Washington, a bipartisan consensus is emerging that the failed US policy of “constructive engagement” with China must be replaced with concrete counteraction.

For example, in a Harvard University essay this month, Obama’s defence secretary, Ashton Carter, writes: “Washington since the end of the Cold War has often backed down in the face of Chinese bullying. From aggressive territorial claims to human-rights abuses and brazen theft on a trillion-dollar scale, China has violated core international norms time and again with little repercussions beyond scolding American speeches”.

Mr Carter recommends that, “when China behaves inappropriately on the international stage, the US must firmly push back and stand up for the principles of international order”. Mr Pence has signalled that this is precisely what the Trump administration intends to do.

Brahma Chellaney is a geostrategist and the author, most recently, of the award-winning Water, Peace, and War.

Maldives: India should not rest on its oars

Featured

maldives-india

Brahma Chellaney, The Hindustan Times

Following President Abdulla Yameen’s surprise defeat in the Maldivian election, the air of self-congratulation that pervades in New Delhi risks obscuring the challenges. India ought to learn from its experience with Sri Lanka, where China has retained its influence and leverage even after authoritarian President Mahinda Rajapaksa was thrown out by voters in early 2015. In the Maldives, China may be down, but it’s not out and could, as in Sri Lanka, re-establish its clout through debt-trap diplomacy.

The Maldivian archipelago, despite its tiny population, is of key importance to Indian security, given that it sits astride critical sea lanes through which much of India’s shipping passes. From the Indian naval station on the Lakshadweep island of Minicoy, the Maldives’ northernmost Thuraakunu Island is just 100 kilometers away.

The election victory of opposition candidate Ibrahim Mohamed Solih against an increasingly autocratic Yameen cannot by itself roll back the deep strategic inroads China made during the incumbent president’s rule. To be sure, the outcome represents a triumph of Indian patience. Had India militarily intervened in the Maldives, it could have provoked a nationalistic backlash and strengthened Islamist forces in a country that has supplied the world’s highest per-capita number of foreign fighters to terrorist groups in Syria and Iraq.

After Yameen in February declared a state of emergency and jailed Supreme Court justices and political opponents, India came under pressure, including from the Maldivian opposition, to intervene militarily, as it did once before — in 1988 when it foiled an attempted coup. But unlike in 1988, no legitimate authority was inviting India to send in forces. By erring on the side of caution, and by holding out an intervention threat if the voting were not free and fair, India aided the electoral outcome.

Contrast this with Indian missteps in Nepal, where India woke up belatedly to the political machinations in Kathmandu that led to a flawed new Constitution being promulgated. India then backed the Madhesi movement for constitutional amendments — an agitation that triggered a five-month border blockade of essential supplies to Nepal. The resulting Nepalese grassroots backlash against India eventually contributed to the China-aided communists sweeping Nepal’s 2017 elections.

The restoration of full democracy in the Maldives after, hopefully, a smooth transfer of power on November 17 will be a diplomatic boost for India. However, in India’s larger strategic backyard, China continues to systematically erode Indian clout. Indeed, the Maldivian election result coincided with a major development underscoring Nepal’s pro-China tilt. After implementing a transit transport agreement with China to cut dependence on India, communist-ruled Nepal — under Chinese pressure — has reversed its previous government’s cancellation of the $2.5 billion Budhi-Gandaki Dam project. China bagged the project without competitive bidding. It massively inflated the project cost, which will leave Nepal struggling to repay the Chinese debt.

Yameen, who signed major financing and investment deals with Beijing, will be departing after pushing the Maldives to the brink of a Chinese debt trap. Can the Maldives still escape debt entrapment by emulating the example set by Malaysia’s Mahathir Mohamad, who recently cancelled Chinese projects worth almost $23 billion? Or is the Maldives, like Sri Lanka, already so indebted that it will remain under China’s sway? Nearly 80% of the Maldives’ external debt — equivalent to about one-quarter of its GDP — is owed to China.

Even without any new contracts, the Maldivian debt to China will rise because of the Chinese projects already completed or initiated, thus allowing Beijing to retain its favourite source of leverage. Indeed, Beijing will seek to court Yameen’s successor just as it has in Sri Lanka wooed Rajapaksa’s successor, who has disclosed that China has “gifted” him $300 million “for any project of my wish,” besides constructing South Asia’s largest kidney hospital in his electoral district.

In this light, the post-Yameen Maldives — like Nepal, Bangladesh and Sri Lanka — would likely seek to balance relations with India and China, thus reinforcing how Beijing has fundamentally altered geopolitics in a subregion New Delhi long considered its natural sphere of influence. As Maldives’ closest partner, a proactive India must leverage its ties. India should assist in infrastructure development and be willing to refinance Maldives’ Chinese debt so as to achieve lower costs and a longer-term maturity profile.

India will have to closely watch China’s activities in the unpopulated Maldivian islands it managed to lease during Yameen’s reign. China is muscling its way into India’s maritime backyard, including sending warships to the Maldives and signing an accord for an ocean observatory there that could provide critical data for deploying Chinese nuclear submarines. The new Maldivian government should be left in no doubt about India’s “red lines”.

Brahma Chellaney is a geostrategist and author.

© The Hindustan Times, 2018.

The China Backlash

Featured

US President Donald Trump’s headline-grabbing trade war with China should not obscure a broader pushback against the country’s mercantilist trade, investment, and lending practices. In fact, China’s free ride could be coming to an end.

712d438997986267461f01784924b61d.2-1-super.1

On a recent official visit to China, Malaysian Prime Minister Mahathir Mohamad criticized his host country’s use of major infrastructure projects – and difficult-to-repay loans – to assert its influence over smaller countries. While Mahathir’s warnings in Beijing against “a new version of colonialism” stood out for their boldness, they reflect a broader pushback against China’s mercantilist trade, investment, and lending practices.

Since 2013, under the umbrella of its “Belt and Road Initiative,” China has been funding and implementing large infrastructure projects in countries around the world, in order to help align their interests with its own, gain a political foothold in strategic locations, and export its industrial surpluses. By keeping bidding on BRI projects closed and opaque, China often massively inflates their value, leaving countries struggling to repay their debts.

Once countries become ensnared in China’s debt traps, they can end up being forced into even worse deals to compensate their creditor for lack of repayment. Most notably, last December, Sri Lanka was compelled to transfer the Chinese-built strategic port of Hambantota to China on a 99-year, colonial-style lease, because it could longer afford its debt payments.

Sri Lanka’s experience was a wake-up call for other countries with outsize debts to China. Fearing that they, too, could lose strategic assets, they are now attempting to scrap, scale back, or renegotiate their deals. Mahathir, who previously cleared the way for Chinese investment in Malaysia, ended his trip to Beijing by canceling Chinese projects worth almost $23 billion.

Countries as diverse as Bangladesh, Hungary, and Tanzania have also canceled or scaled back BRI projects. Myanmar, hoping to secure needed infrastructure without becoming caught up in a Chinese debt trap, has used the threat of cancellation to negotiate a reduction in the cost of its planned Kyaukpyu port from $7.3 billion to $1.3 billion.

Even China’s closest partners are now wary of the BRI. In Pakistan, which has long worked with China to contain India and is the largest recipient of BRI financing, the new military-backed government has sought to review or renegotiate projects in response to a worsening debt crisis. In Cambodia, another leading recipient of Chinese loans, fears of effectively becoming a Chinese colony are on the rise.

The backlash against China can be seen elsewhere, too. The recent annual Pacific Islands Forum meeting was one of the most contentious in its history. Chinese policies in the region, together with the Chinese delegation leader’s behavior at the event itself, drove the president of Nauru – the world’s smallest republic, with just 11,000 inhabitants – to condemn China’s “arrogant” presence in the South Pacific. China cannot, he declared, “dictate things to us.”

When it comes to trade, US President Donald Trump’s escalating trade war with China is grabbing headlines, but Trump is far from alone in criticizing China. With policies ranging from export subsidies and nontariff barriers to intellectual-property piracy and tilting the domestic market in favor of Chinese companies, China represents, in the words of Harvard’s Graham Allison, the “most protectionist, mercantilist, and predatory major economy in the world.”

As the largest merchandise exporter in the world, China is many countries’ biggest trading partner. Beijing has leveraged this role by employing trade to punish those that refuse to toe its line, including by imposing import bans on specific products, halting strategic exports (such as rare-earth minerals), cutting off tourism from China, and encouraging domestic consumer boycotts or protests against foreign businesses.

The fact is that China has grown strong and rich by flouting international trade rules. But now its chickens are coming home to roost, with a growing number of countries imposing antidumping or punitive duties on Chinese goods. And as countries worry about China bending them to its will by luring them into debt traps, it is no longer smooth sailing for the BRI.

Beyond Trump’s tariffs, the European Union has filed a complaint with the World Trade Organization about China’s practices of forcing technology transfer as a condition of market access. China’s export subsidies and other trade-distorting practices are set to encounter greater international resistance. Under WTO rules, countries may impose tariffs on subsidized goods from overseas that harm domestic industries.

Now, Chinese President Xi Jinping finds himself not only defending the BRI, his signature foreign-policy initiative, but also confronting domestic criticism, however muted, for flaunting China’s global ambitions and thereby inviting a US-led international backlash. Xi has discarded one of former Chinese strongman Deng Xiaoping’s most famous dicta: “Hide your strength, bide your time.” Instead, Xi has chosen to pursue an unabashedly aggressive strategy that has many asking whether China is emerging as a new kind of imperialist power.

International trade has afforded China enormous benefits, enabling the country to become the world’s second-largest economy, while lifting hundreds of millions of people out of poverty. The country cannot afford to lose those benefits to an international backlash against its unfair trade and investment practices.

China’s reliance on large trade surpluses and foreign-exchange reserves to fund the expansion of its global footprint makes it all the more vulnerable to the current pushback. In fact, even if China shifts its strategy and adheres to international rules, its trade surplus and foreign-currency reserves will be affected. In short, whichever path it chooses, China’s free ride could be coming to an end.

© Project Syndicate, 2018.