From Russia With Unrequited Love

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A column internationally syndicated by Project Syndicate

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Japanese Prime Minister Shinzo Abe has assiduously courted Russian President Vladimir Putin, meeting with him more than a dozen times in four years. This month he hosted Putin in Tokyo and in his hometown of Nagato (famed for its onsen, or natural hot springs). But Abe’s courtship has so far yielded little for Japan, and much for Russia.

Abe’s diplomatic overtures to Putin are integral to his broader strategy to position Japan as a counterweight to China, and to rebalance power in Asia, where Japan, Russia, China, and India form a strategic quadrangle. Abe has already built a close relationship with India, and he sees improved relations with Russia – with which Japan never formally made peace after World War II – as the missing ingredient for a regional power equilibrium.

But Abe’s trust-building efforts with Russia are not aimed only at checking Chinese aggression. He also wants Russia to return its southernmost Kuril Islands – a resource-rich area known as the Northern Territories in Japan – which the Soviet Union seized just after the United States dropped nuclear bombs on Hiroshima and Nagasaki in August 1945. In exchange, Abe has offered economic aid, investments in Russia’s neglected Far East, and major energy deals.

Abe has, however, encountered several obstacles. For starters, Japan is a participant in the US-led sanctions that were imposed on Russia after it annexed Crimea in March 2014. These sanctions have pushed Russia closer to its traditional rival, China; and Putin has publicly identified the sanctions as a hindrance to concluding a peace treaty with Japan.

In response to Abe’s overtures, Putin has doggedly tried to drive a hard bargain. Russia has bolstered its defenses on the four disputed islands, and, just prior to this month’s summit, he told the Japanese media that the current territorial arrangement suits Russian interests. “We think that we have no territorial problems,” he said. “It’s Japan that thinks that it has a territorial problem with Russia.”

The US-led sanctions regime and low oil prices have battered the Russian economy, which is expected to contract by 0.8% in 2016. Thus, Putin is more reluctant than ever to offer territorial concessions, lest it tarnish his domestic image as a staunch defender of Russian national interests.

Against this backdrop, it is not surprising that Abe left the recent “onsen summit” with dashed hopes of resolving the territorial dispute, while Putin returned home with 68 new commercial accords. Many of the new agreements are symbolic, but some are substantive, including deals worth $2.5 billion and an agreement to set up a $1 billion bilateral-investment fund.

Under the latter agreement, Japan and Russia are supposed create a “special framework” for joint economic activities on the disputed islands. But the plan has already run into trouble. Peter Shelakhaev, a senior Russian official who leads the government’s Far East Investment and Export Agency, has indicated that there are legal hurdles to establishing such a framework, and that Japanese firms doing business on the Kurils would have to pay taxes to Russia. If Japan did that, however, it would effectively be recognizing Russia’s jurisdiction over the islands.

Abe has thus been denied the legacy that he sought, while Putin has succeeded in easing Russia’s international isolation. Abe was the first G7 leader to hold a summit with Putin after Russia annexed Crimea, and now Russia has won Japan’s economic cooperation, too.

Japan is the only G7 country that has a territorial dispute with Russia, and it is clearly more eager to reach a deal than the Kremlin is. But this has only strengthened Russia’s hand. While Japan has softened its position, and signaled that it may accept only a partial return of the islands, Russia has grown only more intransigent. After the recent summit, Abe revealed that Putin now seems to be reneging on a 1956 agreement between Japan and the Soviet Union, which stipulates that the smaller two of the four islands will be returned to Japan after a peace treaty is signed.

As it happens, this year marks the 60th anniversary of that joint declaration, which was widely viewed as a breakthrough at the time. The Kremlin is now suggesting that its commitment to fulfilling the declaration was conditional on Japan not joining any security alliance against Russia. And Putin has expressed concerns that the 1960 Japan-US Security Treaty would extend to the disputed islands if they were returned, thus allowing the US to establish a military presence there.

Japan is in no position to address Russia’s concerns. It cannot opt out of the US-led sanctions regime; and it cannot exempt the disputed Kurils from its security treaty with the US, especially now that it has been urging the US to provide an explicit commitment to defend the Japanese-controlled Senkaku Islands, over which China claims sovereignty.

Putin, for his part, appears smugly content with his negotiating position. Not only did he arrive almost three hours late to the onsen summit, in keeping with his habit of leaving foreign leaders waiting; he also declined a Japanese government gift – a male companion for his native Japanese Akita dog, which Japan gave him in 2012.

There is little hope now that Abe will see tangible returns on the political capital he has invested in cultivating Putin. And Japan’s dilemma will only deepen. US President-elect Donald Trump’s desire to improve relations with Russia may give Abe leeway to continue wooing Putin; but if Russia gets the US in its corner, it won’t need Japan anymore.

The Great Water Folly

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Brahma Chellaney, The Hindustan Times

imagesThe linkages between water stress, sharing disputes and environmental degradation threaten to trap Asia in a vicious cycle. In a continent where China’s unilateralism stands out as a destabilizing factor, only four of the 57 transnational river basins have a treaty on water sharing or institutionalized cooperation. Indeed, the only Asian treaties incorporating specific sharing formulas are between India and its downriver neighbours, Pakistan and Bangladesh.

When Pakistan was carved out of India as the first Islamic republic of the post-colonial era, the partition left the Indus headwaters in India, arming it with formidable water leverage over the newly-created country. Yet India ultimately agreed under World Bank and US pressure in 1960 to what still ranks as the world’s most generous (and lopsided) water-sharing pact.

The Indus Waters Treaty (IWT) reserved for Pakistan the largest three rivers that make up more than four-fifths of the Indus-system waters, leaving for India just 19.48% of the total waters. After gifting the lion’s share of the waters to the congenitally hostile Pakistan, India also contributed $173.63 million for dam and other projects there. The Great Water Folly — one of the major strategic problems bequeathed to future Indian generations by the Nehruvian era — began exacting serious costs within a few years.

Far from mollifying an implacable foe, the IWT whetted Pakistan’s territorial revisionism, prompting its 1965 military attack on India’s Jammu and Kashmir. The attack was aimed at gaining political control of the land through which the three largest rivers reserved for Pakistani use flowed, although only one of them originates in J&K. The 1965 attack was essentially a water war.

India’s naïve assumption that it traded water munificence for peace in 1960 has backfired, saddling it with an iniquitous treaty of indefinite duration and keeping water as a core issue in its relations with Pakistan. As for Pakistan, after failing to achieve its water designs militarily in 1965, it has continued to wage a water war against India by other means, including diplomacy and terrorism. Put simply, 56 years after the IWT was signed, Pakistan’s covetous, water-driven claim to India’s J&K remains intact.

Pakistan has cleverly employed the IWT to have its cake and eat it too. While receiving the largest quantum of waters reserved by any treaty for a downstream state, it uses the IWT to sustain its conflict and tensions with India. Worse still, this scofflaw nation repays the upper riparian’s unparalleled water largesse with blood by waging an undeclared, terrorism-centred war, with the Nagrota attack the latest example.

Pakistan has recently succeeded — for the second time in this decade — in persuading a partisan World Bank to initiate international arbitral proceedings against India. Seeking international intercession is part of Pakistan’s ‘water war’ strategy against India, yet it is the World Bank’s ugly role in the latest instance that sticks out. This should surprise few.

After all, it was the World Bank’s murky role that spawned the inherently unequal IWT. Whereas the British colonial government was the instrument in India’s 1947 land partition, the Bank served as the agent to partition the Indus-system rivers, floating the river-partitioning proposal and ramming it down India’s throat. India’s full sovereignty rights were limited to the smallest three of the six rivers, with the Bank uniquely signing a binational treaty as its guarantor.

Since then, World Bank support enabled Pakistan not only to complete mega-dams but also to sustain its ‘water war’ strategy against India by seeking to invoke international intercession repeatedly. Now, in response to Pakistan’s complaint over the design features of two midsized Indian hydropower projects, the World Bank has sought to initiate two concurrent processes that mock the IWT’s provisions for resolving any ‘questions’, ‘differences’ or ‘disputes’ between the parties: It is appointing both a court of arbitration (as sought by Pakistan) and a neutral expert (as suggested by India), while admitting that “pursuing two concurrent processes under the treaty could make it unworkable over time”.

India says it “cannot be party to actions” by the World Bank that breach the IWT’s terms, implying that it might not accept the arbitral tribunal. India’s bark, however, has always been worse than its bite. While protesting the Bank’s “legally untenable” move in the latest case, India has shown little inclination to respond through punitive counter-measures.

Had China been in India’s place, it would have sought to discipline the Bank and Pakistan. Indeed, it is unthinkable that China would have countenanced such an egregiously inequitable treaty. While mouthing empty rhetoric, India still allows Pakistan to draw the IWT’s full benefits even as Pakistan bleeds it by exporting terrorists.

The truth is this: The IWT symbolizes India’s enduring strategic naiveté and negligence. Despite water shortages triggering bitter feuds between Punjab and some other states, India has failed to tap even the allocated 19.48% share of the Indus Basin resources.

For example, the waters of the three India-earmarked rivers not utilized by India aggregate to 10.37 billion cubic metres (BCM) yearly according to Pakistan, and 11.1 BCM according to the UN. These bonus outflows to Pakistan alone amount to six times Mexico’s total water share under its treaty with the US, and are many times greater than the total volumes spelled out in the Israel-Jordan water arrangements. Although the IWT permits India to store 4.4 BCM of waters from the Pakistan-reserved rivers, a careless India has built no storage. And despite the treaty allowing India to build hydropower plants with no dam reservoir, its total installed generating capacity in J&K currently does not equal the size of a single new dam in Pakistan like the 4,500-megawatt Diamer-Bhasha, whose financing for construction was approved last week.

Brahma Chellaney is a geostrategist and author.

© The Hindustan Times, 2016.

A Water War in Asia?

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A column internationally syndicated by Project Syndicate.

Tensions over water are rising in Asia — and not only because of conflicting maritime claims. While territorial disputes, such as in the South China Sea, attract the most attention — after all, they threaten the safety of sea lanes and freedom of navigation, which affects outside powers as well — the strategic ramifications of competition over transnationally shared freshwater resources are just as ominous.

Asia has less fresh water per capita than any other continent, and it is already facing a water crisis that, according to an MIT study, will continue to intensify, with severe water shortages expected by 2050. At a time of widespread geopolitical discord, competition over freshwater resources could emerge as a serious threat to long-term peace and stability in Asia.

Already, the battle is underway, with China as the main aggressor. Indeed, China’s territorial grab in the South China Sea has been accompanied by a quieter grab of resources in transnational river basins. Reengineering cross-border riparian flows is integral to China’s strategy to assert greater control and influence over Asia.

China is certainly in a strong position to carry out this strategy. The country enjoys unmatched riparian dominance, with 110 transnational rivers and lakes flowing into 18 downstream countries. China also has the world’s most dams, which it has never hesitated to use to curb cross-border flows. In fact, China’s dam builders are targeting most of the international rivers that flow out of Chinese territory.

Most of China’s internationally shared water resources are located on the Tibetan Plateau, which it annexed in the early 1950s. Unsurprisingly, the plateau is the new hub of Chinese dam building. Indeed, China’s 13th five-year plan, released this year, calls for a new wave of dam projects on the Plateau.

Moreover, China recently cut off the flow of a tributary of the Brahmaputra River, the lifeline of Bangladesh and northern India, to build a dam as part of a major hydroelectric project in Tibet. And the country is working to dam another Brahmaputra tributary, in order to create a series of artificial lakes.

China has also built six mega-dams on the Mekong River, which flows into Southeast Asia, where the downstream impact is already visible. Yet, instead of curbing its dam-building, China is hard at work building several more Mekong dams.

Likewise, water supplies in largely arid Central Asia are coming under further pressure as China appropriates a growing volume of water from the Illy River. Kazakhstan’s Lake Balkhash is now at risk of shrinking substantially, much like the Aral Sea — located on the border with Uzbekistan — which has virtually dried up in less than 40 years. China is also diverting water from the Irtysh, which supplies drinking water to Kazakhstan’s capital Astana and feeds Russia’s Ob River.

For Central Asia, the diminished transboundary flows are just one part of the problem. China’s energy, manufacturing, and agricultural activities in sprawling Xinjiang are having an even greater impact, as they contaminate the waters of the region’s transnational rivers with hazardous chemicals and fertilizers, just as China has done to the rivers in its Han heartland.

Of course, China is not the only country stoking conflict over water. As if to underscore that the festering territorial dispute in Kashmir is as much about water as it is about land, Pakistan has, for the second time this decade, initiated international arbitral tribunal proceedings against India under the terms of the 1960 Indus Waters Treaty. The paradox here is that downstream Pakistan has used that treaty — the world’s most generous water-sharing deal, reserving for Pakistan more than 80% of the waters of the six-river Indus system — to sustain its conflict with India.

Meanwhile, landlocked Laos — aiming to export hydropower, especially to China, the mainstay of its economy — has just notified its neighbors of its decision to move ahead with a third controversial project, the 912-megawatt Pak Beng dam. It previously brushed aside regional concerns about the alteration of natural-flow patterns to push ahead with the Xayaburi and Don Sahong dam projects. There is no reason to expect a different outcome this time.

The consequences of growing water competition in Asia will reverberate beyond the region. Already, some Asian states, concerned about their capacity to grow enough food, have leased large tracts of farmland in Sub-Saharan Africa, triggering a backlash in some areas. In 2009, when South Korea’s Daewoo Logistics Corporation negotiated a deal to lease as much as half of Madagascar’s arable land to produce cereals and palm oil for the South Korean market, the ensuing protests and military intervention toppled a democratically elected president.

The race to appropriate water resources in Asia is straining agriculture and fisheries, damaging ecosystems, and fostering dangerous distrust and discord across the region. It must be brought to an end. Asian countries need to clarify the region’s increasingly murky hydropolitics. The key will be effective dispute-resolution mechanisms and agreement on more transparent water-sharing arrangements.

Asia can build a harmonious, rules-based water management system. But it needs China to get on board. At least for now, that does not seem likely.

Brahma Chellaney, Professor of Strategic Studies at the New Delhi-based Center for Policy Research and Fellow at the Robert Bosch Academy in Berlin, is the author of nine books, including Asian Juggernaut, Water: Asia’s New Battleground, and Water, Peace, and War: Confronting the Global Water Crisis.

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.

Trump could ‘pivot’ to Asia like Obama never did

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Trump may well launch his own ‘Asian pivot’ in the vacuum of Obama’s lackluster effort.

Brahma Chellaney, Nikkei Asian Review, November 21, 2016

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U.S. President Barack Obama’s strategic “pivot” toward Asia, unveiled in 2012, attracted much international attention but did little to tame China’s muscular approach to territorial, maritime and trade disputes. Indeed, with the United States focused on the Islamic world, Obama’s much-touted Asian pivot seemed to lose its way somewhere in the arc between Iraq and Libya. Will President-elect Donald Trump’s approach to Asia be different?

In his first meeting with a foreign leader since his surprise Nov. 8 election triumph, Trump delivered a reassuring message to Japanese Prime Minister Shinzo Abe who, in turn, described him as a “trustworthy leader.” In a smart diplomatic move, Abe made a special stop in New York on Nov. 17, en route to the Asia-Pacific Economic Cooperation summit in Peru, to meet face-to-face with Trump, who shares his conservative, nationalistic outlook.

Today, Asia faces the specter of power disequilibrium. Concern that Trump could undo Obama’s pivot to Asia by exhibiting an isolationist streak ignores the fact that the pivot has remained more rhetorical than real. Even as Obama prepares to leave office, the pivot — rebranded as “rebalancing” — has not acquired any concrete strategic content.

If anything, the coining of a catchy term, “pivot,” has helped obscure the key challenge confronting the U.S.: To remain the principal security anchor in Asia in the face of a relentless push by a revisionist China to expand its frontiers and sphere of influence.

Trump indeed could face an early test of will from a China determined to pursue its “salami slicing” approach to gaining regional dominance. In contrast to Russia’s preference for full-fledged invasion, China has perfected the art of creeping, covert warfare through which it seeks to take one “slice” of territory at a time, by force.

With Obama having increasingly ceded ground to China in Asia during his tenure, Beijing feels emboldened, as evident in its incremental expansionism in the South China Sea and its dual Silk Road projects under the “One Belt, One Road” initiative. The Maritime Silk Road is just a new name for Beijing’s “string of pearls” strategy, aimed at increasing its influence in the Indian Ocean. Meanwhile, without incurring any international costs, China aggressively continues to push its borders far out into international waters in a way that no other power has done.

Indeed, boosting naval prowess and projecting power far from its shores are at the center of China’s ambition to fashion a strongly Sino-centric Asia. Boasting one of the world’s fastest-growing undersea fleets, China announced earlier in November that its first aircraft carrier, the Liaoning, is ready for combat. Such revanchist moves will inevitably test the new U.S. administration’s limits.

Tougher approach

In this light, it is difficult to see how Trump can afford to cut back on U.S. military deployments and assets in the Asia-Pacific region. What seems more likely is that Trump will live up to his election campaign promise to invest greater resources in the military. By relaxing some of the Obama-era constraints, Trump, in keeping with his “tough guy” image, could permit the U.S. navy and air force to initiate more aggressive reconnaissance and freedom-of-navigation operations in the South China Sea. He could also invite China’s wrath by getting Japan to join U.S. air and sea patrols in the disputed waters.

Trump is also expected to be more assertive diplomatically than Obama, who refused to speak up even when China occupied the Scarborough Shoal, located well within the Philippines’ exclusive economic zone. The 2012 takeover occurred despite a U.S.-brokered deal under which both Beijing and Manila agreed to withdraw their vessels from the area. Yet the U.S. did nothing in response to China’s move, despite its mutual-defense treaty with the Philippines. That inaction helped spur China’s frenzied creation of artificial islands in the South China Sea.

In late 2013, when China unilaterally declared an air defense identification zone covering territories it claims but does not control in the East China Sea, Obama again hesitated. Indeed, Washington, far from postponing Vice President Joe Biden’s trip to Beijing to express disapproval of the Chinese action, advised U.S. commercial airlines to respect the ADIZ — an action that ran counter to Japan’s advice to its carriers to ignore China’s demand for advance notice of flight plans through the zone. In effect, the U.S. condoned China’s move to establish the ADIZ.

Philippine President Rodrigo Duterte’s much-criticized action to cut his own deal with China, involving billions of dollars in Chinese investment pledges, should be seen in this context. The deal, however, is likely to hold only until the next major Chinese incursion.

The paradox here is that Beijing’s rising assertiveness helped the U.S. return to Asia’s center-stage — yet, even as China became more aggressive with its neighbors, the Obama administration dithered over how to rein in such expansionism or reassure America’s jittery Asian allies. In fact, the more assertive China has become in pressing its territorial and maritime claims, from the East China Sea to the Himalayas, the more reluctant the Obama administration has been to take sides in Asia’s territorial disputes — although they center on Beijing’s efforts to change the status quo with America’s strategic allies or partners.

No less significant is Obama’s failure to provide strategic heft to his Asia pivot. By studiously avoiding disputes with China while working to balance America’s relationships with key Asian states, his administration shied away from tough strategic choices. Indeed, no sooner had the pivot policy been unveiled than a course correction was effected, with the administration tamping down the pivot’s military aspects and laying emphasis instead on greater U.S. economic engagement with Asia. Even the modest measure to permanently rotate up to 2,500 U.S. marines through Darwin, Australia, is yet to be fully implemented.

To countries bearing the brunt of China’s recidivist policies, this lack of clarity has not only raised doubts about the U.S. commitment, but also left them effectively at the mercy of a regional predator. That, in turn, has forced several of them to tread with excessive caution around Chinese concerns and interests.

Shoring up alliances

Far from retreating from Asia, the U.S. under Trump is likely to bolster alliances and partnerships with states around China’s periphery. His administration may even support constitutional and national security reforms in Japan, on the assumption that a Japan that does more for its own defense will help to forestall the emergence of a destabilizing power imbalance in East Asia. Such support will also fit well with Trump’s top priority to halt the erosion of America’s relative power through comprehensive domestic renewal, including reining in the mounting U.S. budget deficit.

Trump’s election, however, has dimmed prospects for full implementation of the 12-nation, Trans-Pacific Partnership trade agreement. The TPP, which excludes not only China but also America’s close friends like India and South Korea, has been presented by Obama as the most important component of his unhinged pivot to Asia. In truth, the TPP is hardly a transformative initiative: With half its members already boasting bilateral free trade agreements with Washington, the TPP’s main effect would have been to create a free trade agreement between Japan and the U.S., which together account for about 80% of the gross domestic product of TPP signatories.

Trade is one area where Trump must deliver on his campaign promises or risk losing his credibility with the blue-collar constituency that helped propel him to victory. His administration not only will seek to renegotiate parts of the TPP — to the discomfit of Abe, who has made the trade deal a pillar of his economic reforms — but also is unlikely to give China a free pass on its trade manipulation. For this and many other reasons, U.S.-China ties could be in for a rough patch.

At a time when the very future of the Asian order looks uncertain, Trump could pivot to Asia in a way Obama did not. But today, no single power, not even the U.S., can shape developments on its own in Asia, including ensuring a rules-based order. His administration will have to work closely with likeminded states — from Japan and Australia to India and Vietnam — to build a stable balance of power in Asia.

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

© Nikkei Asian Review, 2016.

China’s sole ally in Asia might get more than it wished for

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BY The Japan Times, November 8, 2016

sino-pak-imageWhen China joined hands with the United States earlier this year at the United Nations Security Council to approve the toughest new international sanctions in two decades against North Korea, it implicitly highlighted that Beijing now is left with just one real ally in Asia — Pakistan. Indeed, China has forged with Pakistan one of the closest and most-enduring relationships in international diplomacy.

Mao Zedong famously said China and North Korea were as close as lips are to teeth. Similarly, Beijing now compares its strategic nexus with Pakistan to the closeness between lips and teeth, calling that country its “irreplaceable all-weather friend” and boasting of an “iron brotherhood” with it.

In reality, this is largely a one-sided relationship that is turning Pakistan into China’s client and guinea pig.

For example, Beijing has sold Pakistan outdated or untested nuclear power reactors and prototype weapon systems not deployed by the Chinese military. The two AC-1000 reactors currently under construction near the southern Pakistani port city of Karachi represent a model China has adapted from French designs but not built at home.

According to a recent Pentagon report, Pakistan is not just “China’s primary customer for conventional weapons,” but also is likely to host a Chinese naval hub geared toward power projection in the Indian Ocean region. It is well documented that China helped build Pakistan’s arsenal of nuclear weapons, with covert Chinese nuclear and missile assistance still persisting.

Pakistan is the linchpin of Chinese President Xi Jinping’s dual Silk Road projects, officially known as “One Belt, One Road.”

By launching work on a $46 billion “economic corridor” stretching from Xinjiang to Pakistan’s Chinese-built and-run Gwadar port, Xi has made that country the central link between the twin Silk Road initiatives, which aim to employ geoeconomic tools to create a “Sinosphere” of trade, communications, transportation and security links. The corridor will link up Beijing’s maritime and overland Silk Roads, thereby shortening China’s route to the Middle East by 12,000 km and giving it access to the Indian Ocean, where it would be able to challenge India in its own maritime backyard.

Not surprisingly, Xi has gone out of his way to shield Pakistan, including from accusations that its intelligence service was behind recent grisly terrorist attacks in Afghanistan, Bangladesh and India. For example, Xi ensured that the final communique issued at the end of the Oct. 14-15 summit of the five BRICS countries — Brazil, China, India, Russia and South Africa — omitted any reference to state sponsorship of terror or to any Pakistan-based terrorist group, even as it mentioned organizations like the Islamic State and al-Nusra.

A more potent reminder of such support was China’s action last month in blocking proposed U.N. sanctions on a Pakistan-based terrorist leader Masood Azhar, who heads Jaish-e-Mohammed, a covert front organization for Pakistani intelligence service. It was the sixth time since September 2014 that China singlehandedly thwarted sanctions against Azhar, despite support for the move by all other members of the Security Council’s Resolution 1267 committee, including the United States, Britain and France. Resolution 1267 mandates U.N. sanctions on the Islamic State, al-Qaida and associated individuals and entities.

The Security Council proscribed Jaish-e-Mohammed way back in 2001, yet the group operates openly from its base in Pakistan’s largest province of Punjab. The need for U.N. sanctions against the group’s chief has been underscored by evidence linking him and his group to two terrorist attacks this year on Indian military bases that killed 27 soldiers.

Despite repeatedly vetoing U.N. action against Azhar, China seems unconcerned that it could be seen as complicit in the killing of the Indian soldiers.

Previously, China also blocked U.N. action against some other Pakistan-based terrorist entities or individuals. For example, it came in the way of the U.N. proscribing United Jihad Council chief Syed Salahuddin and probing how U.N.-designated terrorist Hafiz Saeed is still able to raise funds and organize large public rallies in major Pakistani cities. With China’s help, Pakistan escaped U.N. censure for freeing on bail Zaki-ur Rehman Lakhvi, the mastermind of the 2008 Mumbai terrorist strikes.

In fact, with China boosting its strategic investments in Pakistan, Beijing is stepping up its diplomatic, economic and military support to that country. In the process, it is seeking to cement Pakistan’s status as its client.

For example, China has already secured exclusive rights for the next 40 years to run Gwadar, which could become a hub for Chinese naval operations in the Indian Ocean. The Shanghai Stock Exchange, for its part, is poised to take a 40 percent stake in Pakistan’s bourse.

Some analysts like the American author Gordon G. Chang believe that the tide of new Chinese strategic projects, including in divided and disputed Kashmir, is turning Pakistan into China’s “newest colony.”

Indeed, Beijing has persuaded internally torn Pakistan to set up special security forces, including a new 13,000-strong army division, to protect the Chinese projects. Still, the growing security costs of the “economic corridor” to the Indian Ocean prompted a Chinese state paper in September to warn that China “be prepared for potential setbacks,” adding that “it would be unwise to put all its eggs in one basket.”

The fact is that the corridor will cement Pakistan’s status as Beijing’s economic and security client. By tightening China’s grip over the country, it will preclude Pakistan from possibly emulating the example of Myanmar or North Korea to escape Beijing’s clutches.

Indeed, several years before China unveiled its plan to build the corridor, it started stationing its own troops in the Pakistan-held part of Kashmir, ostensibly to shield its ongoing highway, dam and other projects in the mountainous region.

The implications of China’s growing strategic penetration of Pakistan are ominous for the region and for Pakistan’s own future. Concern is increasing in Pakistan that, thanks to the Chinese projects, the country is slipping into a massive debt trap that could compromise its sovereignty and future.

Brahma Chellaney, a professor of strategic studies at the New Delhi-based Center for Policy Research and a fellow at the Robert Bosch Academy in Berlin, is the author of nine books, including “Asian Juggernaut,” “Water: Asia’s New Battleground,” and “Water, Peace, and War: Confronting the Global Water Crisis.” He is 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.