China’s Made-in-America Success Story

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Column internationally distributed by Project Syndicate. September 2012

America’s strategy in Asia for more than a century has sought a stable balance of power to prevent the rise of any hegemon. Yet the United States, according to its official National Security Strategy, is also committed to accommodating “the emergence of a China that is peaceful and prosperous and that cooperates with us to address common challenges and mutual interests.” So America’s Asia policy has in some ways been at war with itself.

In fact, the US has played a key role in China’s rise. For example, rather than sustain trade sanctions against China after the Tiananmen Square massacre in 1989, the US decided instead to integrate the country into global institutions. But US foreign policy had been notable for a China-friendly approach long before that.

In 1905, President Theodore Roosevelt, who hosted the peace conference in Portsmouth, New Hampshire, after the Russo-Japanese War, argued for the return of Manchuria to Manchu-ruled China and for a balance of power in East Asia. The war ended up making the US an active participant in China’s affairs.

After the Communists seized power in China in 1949, the US openly viewed Chinese Communism as benign, and thus distinct from Soviet Communism. And it was after the Communists crushed the pro-democracy movement in 1989 that the US helped to turn China into an export juggernaut that has accumulated massive trade surpluses and become the principal source of capital flows to the US.

America’s policy toward Communist China has traversed three stages. In the first phase, America courted Mao Zedong’s regime, despite its 1950-1951 annexation of Tibet and domestic witch hunts, such as the Hundred Flowers Campaign, the brief liberalization that many Western observers believe was a ploy designed to flush out opponents. Courtship gave way to estrangement during the second phase, as US policy for much of the 1960’s sought to isolate China.

The third phase began immediately after the 1969 Sino-Soviet military clashes, with the US actively seeking to exploit the rift in the Communist world by aligning China with its anti-Soviet strategy. Although China clearly instigated the bloody border clashes, America sided with Mao’s regime. That helped to lay the groundwork for the China “opening” of 1970-1971, engineered by US National Security Adviser Henry Kissinger, who until then had no knowledge of the country.

Since then, the US has pursued a conscious policy of aiding China’s rise. Indeed, President Jimmy Carter sent a memo to various US government departments instructing them to help in China’s rise — an approach that remains in effect today, even as America seeks to hedge against the risk that Chinese power gives rise to arrogance. Indeed, even China’s firing of missiles into the Taiwan Strait in 1996 did not change US policy. If anything, the US has been gradually loosening its close links with Taiwan, with no US cabinet member visiting the island since those missile maneuvers.

Seen in this light, China’s spectacular economic success — including the world’s largest trade surplus and foreign-currency reserves — owes much to US policy from the 1970’s on. Without the significant expansion in US-Chinese trade and financial relations, China’s growth would have been much slower and more difficult to sustain.

Allies of convenience during the second half of the Cold War, the US and China emerged from it as partners tied by interdependence. America depends on China’s trade surplus and savings to finance its outsize budget deficits, while China relies on its huge exports to the US to sustain its economic growth and finance its military modernization. By plowing more than two-thirds of its mammoth foreign-currency reserves into US dollar-denominated assets, China has gained significant political leverage.

China is thus very different from previous US adversaries. America’s interests are now so closely intertwined with China that a policy to isolate or confront it is not feasible. Even on the issue of democracy, the US prefers to lecture other dictatorships rather than the world’s largest autocracy.

Yet it is also true that the US is uneasy about China’s not-too-hidden aim to dominate Asia — an objective that runs counter to US security and commercial interests and to the larger goal of securing a balance in power in Asia. To avert Chinese dominance, the US has already started to build countervailing influences and partnerships, without making any attempt to contain China.

For the US, China’s growing power actually helps to validate its forward military deployments in Asia, maintain existing allies in the region, and win new strategic partners. Indeed, an increasingly assertive China has proven a diplomatic boon for the US in strengthening and expanding its Asian security relationships.

The lesson is clear: The muscle-flexing rise of a world power can strengthen the strategic relevance and role of a power in relative decline. Barely a decade ago, the US was beginning to feel marginalized in Asia, owing to several developments, including China’s “charm offensive.” But now America has returned firmly to center stage. South Korea has beefed up its military alliance with the US; Japan has backed away from an effort to persuade the US to move its Marine base out of Okinawa; Singapore has allowed the US Navy to station ships; Australia is hosting US Marine and other deployments; and India, Vietnam, Indonesia, and the Philippines, among others, have drawn closer to the US as well.

But no one should have any illusions about US policy. Despite America’s “pivot” to Asia, it intends to stick to its two-pronged approach: seek to maintain a balance of power with the help of strategic allies and partners, while continuing to accommodate a rising China.

Brahma Chellaney, Professor of Strategic Studies at the New Delhi-based Center for Policy Research, is the author of Asian Juggernaut and Water: Asia’s New Battleground.

(c) Project Syndicate, 2012.

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Munificently treading water

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The Japan Times, August 10, 2012

Reciprocity is the first principle of diplomacy, and India has walked the extra mile to befriend neighbors, as underscored by its record on land and water disputes. Yet today, India lives in the world’s most-troubled neighborhood.

India’s generosity on land issues has been well documented. It includes its acceptance of Burmese sovereignty over the Kabaw Valley in 1953, its surrender of British-inherited extraterritorial rights in Tibet in 1954, its giving back of the strategic Haji Pir Pass to Pakistan after the 1965 war, and its similar return of territorial gains plus 93,000 prisoners after the 1971 war that led to East Pakistan’s secession as Bangladesh.

Less well known is India’s generosity on shared river waters, although it is now reeling under a growing water crisis.

The world’s most generous water-sharing pact is the 1960 Indus Waters Treaty, under which India agreed to set aside 80.52 percent of the waters of the six-river Indus system for Pakistan, keeping for itself just the remaining 19.48 percent share. Both in terms of the sharing ratio as well as the total quantum of waters reserved for a downstream state, this treaty’s munificence is unsurpassed in scale in the annals of international water treaties.

Indeed, the volume of water earmarked for Pakistan is more than 90 times greater than the 1.85 billion cubic meters the U.S. is required to release for Mexico under the 1944 U.S.-Mexico Water Treaty.

This unparalleled water generosity, however, only invited trouble for India. Within five years of the Indus treaty, Pakistan launched its second war against India to grab the rest of the disputed territory of Jammu and Kashmir before India had recovered from its humiliating rout in 1962 at the hands of the Chinese. In the first war soon after its creation in 1947, Pakistan seized more than one-third of the original princely state of Jammu and Kashmir.

India’s 1996 Ganges river treaty with Bangladesh guarantees minimum cross-border flows in the dry season — a new principle in international water law. In fact, the treaty equally divides the dry-season downstream Ganges flows between the two countries, while in other seasons when the total Ganges flows average more than 71.48 billion cubic meters per year, Bangladesh’s share is larger than India’s.

Today, Pakistan expects eternal Indian munificence on water even as its military establishment continues to export terror. Yet, with all the water flowing downstream under the treaty, the same question must haunt the Pakistani generals as Lady Macbeth in William Shakespeare’s Macbeth: “Will all great Neptune’s ocean wash this blood clean from my hand?”

In 2010, Pakistan filed a case with the International Court of Arbitration to halt India’s construction of a modest-size, 330-megawatt Kishenganga hydropower plant. Even as India last fall suspended work on the project in response to the arbitration proceedings, Pakistan has fast-tracked its own three-times-larger, Chinese-aided hydropower project at a nearby border site on the same stream, apparently to gain priority right on river-water use under the doctrine of prior appropriation.

Meanwhile, India’s portion of the Indus basin — according to the 2030 Water Resources Group, an international consortium of private-sector companies and institutions — confronts a massive 52 percent deficit between water supply and demand.

The Ganges treaty’s allocations to Bangladesh, while not comparable to the cross-border flows under the Indus treaty, are much larger than the combined allocations set out in the world’s other inter-country water accords signed since the 1990s, including the Jordan-Israel water arrangements, the Komati River sharing between South Africa and Swaziland, and the Lebanese-Syrian agreements over the Orontes and El-Kabir rivers.

Because of the Ganges precedent, Bangladesh now is pressing India to similarly reserve by treaty half of the flows of another but smaller river — the Teesta. And New Delhi seems ready to oblige.

Under the Indian Constitution, water is a provincial issue, not a federal matter. Yet Prime Minister Manmohan Singh has sought to strong-arm a reluctant West Bengal state into accepting a Teesta River treaty on terms dictated by New Delhi.

The fact is that unlike Bangladesh, India is already a seriously water-stressed country. Whereas the annual per-capita water availability in Bangladesh averages 8,252 cubic meters, it has fallen to a paltry 1,560 cubic meters in India.

Lost in such big-hearted diplomacy is the fact that a parched and thirsty India is downriver from China, which, far from wanting to emulate India’s Indus- or Ganges-style water munificence, rejects the very concept of water sharing.

Instead, the Chinese construction of upstream dams on international rivers such as the Mekong, Salween, Brahmaputra, Arun, Sutlej, Indus, Irtysh, Illy and Amur shows that Beijing is increasingly bent on unilateral actions, impervious to the concerns of downstream nations.

Over the next decade, as if to underscore the strategic importance it gives to controlling water resources, China plans to build more large dams than the U.S. or India has managed in its entire history.

By seeking to have its hand on Asia’s water tap through an extensive upstream infrastructure, China challenges India’s interests more than any other country’s.

Although a number of nations stretching from Afghanistan to Vietnam receive waters from the Tibetan Plateau, India’s direct dependency on Tibetan waters is greater than that of any other country. With about a dozen important rivers flowing in from the Tibetan Himalayan region, India gets almost one-third of all its yearly water supplies of 1,911 billion cubic meters from Tibet, according to the latest U.N. data.

Against this background, it is fair to ask: Is India condemned to perpetual generosity toward its neighbors?

This question has assumed added urgency because India has started throwing money around as part of its newly unveiled aid diplomacy — $1 billion in aid to Bangladesh, one-fifth as grant; $500 million to Myanmar; $300 million to Sri Lanka; $140 million to the Maldives; and hundreds of millions of dollars in new aid to Afghanistan and Nepal. If pursued with wishful thinking, such aid generosity is likely to meet the same fate as water munificence.

Generosity in diplomacy can yield rich dividends if it is part of a strategically geared outreach designed to ameliorate the regional-security situation so that India can play a larger global role. But if it is not anchored in the fundamentals of international relations — including reciprocity and leverage building — India risks accentuating its tyranny of geography, even as it is left holding the bag.

Brahma Chellaney’s most recent book is “Water: Asia’s New Battleground” (Georgetown University Press).
The Japan Times: Friday, Aug. 10, 2012

New Political Geography with Old Power Geometry

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Power shifts but international institutional reforms stall

The international institutional structure has remained largely static since the mid-20th century rather than evolving with the changing power realities and challenges. Reforming and restructuring the international system poses the single biggest challenge to preserving global peace, stability and continued economic growth. A 21st-century world cannot remain indefinitely saddled with 20th-century institutions and rules.

Power shifts are an ongoing phenomenon in history. The global power structure continually evolves. Although the focus currently is on the post-Cold War power changes, the Cold War era itself witnessed important shifts.

For example, it was only after the Cold War began that the Soviet Union rose as a global military power, although it failed to become a true economic power. By the second half of the Cold War, Japan and Germany emerged from the ruins of World War II as formidable economic giants. And in keeping with the profound technological and geopolitical changes since the late 1980s, power shifts have become even more pronounced, as underscored by the gradual rise of the East since the 1990s.

The United States emerged as the sole superpower due to a quirk of history — the sudden, unexpected collapse of the Soviet Union. Indeed, when viewed against history, the existence of a single superpower is highly unusual. Even at its pinnacle, the British Empire did not parallel the American Empire in global ascendancy.

Britain was not the hegemon in Europe, so it could not be the global hegemon. In fact, Britain’s failure to gain preeminence in Europe, where it faced Russia, Germany and France, motivated it to concentrate on distant lands. That is how Pax Britannica was established.

The fact is that there has never been a global hegemon on the lines of America. The normal pattern in history is one of uneasy coexistence among several great powers. So, the emergence of a single superpower post-1991 was an anomalous development.

If the international institutional structure is to be recast, the U.S. must begin to adjust to the ongoing shift in its own status from being a global hegemon to turning into less than a global hegemon, yet remaining the world’s leading power. The world is gradually moving toward the normal condition in history — coexistence among quite a few great powers.

A liberal, rules-based international order for the 21st century can be developed if sincere efforts begin toward that goal. That task demands making the international institutional structure more relevant to the newly emerging challenges and power realities.

In essence, this will be possible if the U.S. is willing to take the lead to reform the international institutions before events overwhelm the present system. The choice is to either restructure the international order while international peace prevails or allow developments to take us back to the pattern of past history — namely, decisive change has come only after a major bloody war involving great powers, with the victors of that war shaping the new international system. That is what happened in 1945, 1919, 1815, and 1713. The choice today is to either break free from that historical pattern or remain a prisoner of history.

The world presently is in transition, although we still do not know what the new order would look like. Until recent years, a handful of powers made all the international decisions on global trade, economy, peace, and security. But the emergence of new players in the geopolitical marketplace is fundamentally changing the global power dynamics. With the “new kids on the block” extending their influence beyond their immediate region, the list of players shaping international relations is growing.

The new powers legitimately seek greater participation in international institutions and their decision-making. The power shifts and new global challenges actually symbolize the birth-pangs of a new world order, making far-reaching institutional reforms inescapable.

Changes indeed are already beginning to occur, but rather modestly. For example, the G-20, composed of both wealthy and emerging economies, has replaced the G-8 as the main forum for discussions concerning the global economy. The G-20’s formation, however, was an improvisation designed to defer genuine reforms in the Bretton Woods system. The slow pace of quota and governance reforms in the International Monetary Fund and the reluctance to restructure the World Bank to create a more dynamic institution that breaks free from its donor-recipient straitjacket only highlight the need for a reformed international financial architecture.

Meanwhile, the risks to global economic growth have grown due to several factors, including the large, capricious cross-border capital flows, the Eurozone crisis, and the excessive volatility in commodity prices.

More broadly, the challenge is to accommodate not only the new powers that have been emerging since the Cold War’s end but also the new powers that emerged before the Cold War ended. Indeed, the powers that emerged before the Cold War’s end do not pose any of the special challenges that China does, in the sense that they are liberal democracies promoting rules-based international governance and eschewing muscle-flexing.

Geoeconomics is not dictating geopolitics, as some pundits had romantically visualized when the Cold War came to an end. In fact, politics today drives economics, with political risk dominating the financial markets. But not to accommodate the powers that emerged by the 1980s would only signal that a country counts as a power only when it begins to flex its muscles.

Take Germany, the only booming economy in the eurozone today. Should it not be accommodated as a rule-maker, rather than remaining a rule-taker?

China’s dramatic rise parallels Japan’s phenomenal rise as a major power during the Meiji Era (1867-1912). The difference is that Japan, after having re-emerged as an economic powerhouse from the ashes of World War II, has run into economic stagnation since the 1990s. However, one of the least-noticed developments in Asia in this century has been Japan’s political resurgence. With its pride and assertiveness rising, the nationalist impulse has become conspicuous. Tokyo is intent on influencing Asia’s power balance.

China is beginning to exercise influence far beyond its shores. The larger discussion on accommodating China in the international system, however, misses one key fact: China is already heavily accommodated in the present international order, to an extent that no new power of the past half a century has been. Yet, this cosseted insider has turned into a key obstacle to accommodating other new powers.

China’s accommodation occurred not because of its rising power. China was still backward, poor and internally torn when it was made an integral member of the “hard core” of global geopolitics — the system that deals with international peace and security issues: the United Nations Security Council. In that sense, China is the luckiest of all the new powers.

In fact, Indian Prime Minister Jawaharlal Nehru rejected a U.S. suggestion in the 1950s that India take China’s place in the Security Council. The officially blessed selected works of Nehru quote him as stating on record: “Informally, suggestions have been made by the U.S. that China should be taken into the U.N. but not in the Security Council and that India should take her place in the Council. We cannot, of course, accept this as it means falling out with China and it would be very unfair for a great country like China not to be in the Council.” The selected works also cite Nehru as telling Soviet Premier Marshal Nikolai Bulganin in 1955 why India wasn’t interested in joining the Security Council in place of China: “I feel we should first concentrate on getting China admitted.”

It is thus no accident that China today is a status quo power with regard to the United Nations system, seeking to remain Asia’s sole permanent member in the Security Council and opposing its enlargement, but is a revisionist power on the global financial architecture, seeking an overhaul of the Bretton Woods system.

Today, the world is at a defining moment in its history. Some of the challenges it confronts are unique, ranging from accelerated global warming to cybercrime and the spreading international reach of terrorism.

Healthy, effective international institutions have become critical to building genuine cooperation and power stability. The most pressing challenges are global in nature and demand effective international intervention. Yet the “democratic deficit” of existing international institutions and their inadequacy to play a forward-looking approach has become glaring. This must be addressed for the sake of international security and stability.

Brahma Chellaney is a fellow at the Nobel Institute in Oslo and the author of “Asian Juggernaut” (HarperCollins) and “Water: Asia’s New Battleground” (Georgetown University Press).

The Uneasy U.S.-India-Iran Triangle

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India’s American Friends and Iranian Partners

By Brahma Chellaney

A column internationally syndicated by Project Syndicate

The United States recently took the Iran-sanctions monkey off India’s back: it granted India an exemption from Iran-related financial sanctions in exchange for significant cuts in Indian purchases of Iranian oil. Nevertheless, Iran continues to cast a pall over an otherwise brightening U.S.-India relationship.

From India’s perspective, Iran is an important neighbor with which it can ill afford to rupture its relationship. Indeed, India already seems locked geographically in an arc of failing or dysfunctional states, confronting it with external threats from virtually all directions.

If India joined the U.S. containment strategy against Iran, it would have to bear serious strategic costs. For starters, it would lose access to Afghanistan via Iran, which has served as a conduit for the substantial flow of Indian aid to Kabul. Moreover, containment would undermine India’s energy interests.

Few countries are as dependent on the Persian Gulf region’s hydrocarbons as is India, which imports almost 80% of its consumption. Iran is the world’s third-largest net oil exporter (with the world’s second-largest natural-gas reserves as well), and it is a strategically located gateway to other energy suppliers in Central Asia and the Middle East.

Iraq and Iran used to be India’s principal oil suppliers. But the first fell prey to a long U.S. occupation, and the second currently faces a U.S.-led oil-export embargo designed to throttle it financially. As a result, America’s efforts to give international effect to its new Iran Sanctions Act constitute a double whammy for India.

First, it threatens to sabotage India’s energy-import diversification strategy by making it overly dependent on the Islamist-bankrolling oil monarchies — including Saudi Arabia, the United Arab Emirates, and Qatar — which have managed to ride out the Arab Spring. Second, further isolation of Iran will make it very difficult for India to play a more active role in Afghanistan at a time when the U.S. is hastening its military disengagement there and seeking to cut a deal with the Taliban.

India, one of the largest aid donors to Afghanistan, has no contiguous corridor to that country and must rely on Iran for access. Both countries share a common goal in Afghanistan — to ensure that the Pakistan-backed Taliban does not return to power. If the already-unstable situation there deteriorates after the end of U.S.-led combat operations, India and Iran may be compelled to revive their strategic cooperation of the 1990’s. It was the Northern Alliance, backed by India, Iran, and Russia, that overthrew the Taliban regime in Kabul in late 2001 with the help of America’s air war.

For the U.S. today, containment of Iran is dictated by several geopolitical considerations. One consideration is the need to neutralize the strategic advantage that Iran gained from the U.S. overthrow of Saddam Hussein in neighboring Iraq — a development that helped to empower Iraq’s Shia majority. President George W. Bush called Iran part of an “axis of evil,” yet his decision to invade and occupy Iraq benefited Shia-dominated Iran above all.

Moreover, regional geopolitics pits the powerful “Sunni Crescent,” led by Turkey, Saudi Arabia, Qatar, and the UAE, against the beleaguered “Shia Crescent” states — Iran, Iraq, Syria, and Lebanon. The U.S. has profited from a longstanding alliance with the Sunni bloc. In addition to the strategic advantages, America’s close ties with the oil sheikhdoms — which are among the world’s leading holders of foreign-exchange reserves — contribute to propping up the dollar.

It is against this background that the Iranian nuclear program has come to symbolize the larger geopolitical tensions underlying the confrontation between the U.S. and Iran. Indeed, the nuclear issue has served to rationalize the face-off, with Iran’s leaders playing to their domestic audience by whipping up nuclear nationalism and the U.S. playing to the international audience by harping on the proliferation threat.

India should seek to play the role of honest broker to defuse the threat of military hostilities, which would most likely shut down the world’s most important oil-export route, the Strait of Hormuz (a danger that Iran has said is also implicit in an oil-export embargo against it). But, far from being able to play the role of bridge-builder between the U.S. and Iran, India is being forced to walk a policy tightrope, and its desire to chart a neutral course has annoyed both sides.

Every time a senior Indian delegation visits Iran, or vice versa, the U.S. warns India that its cozying up to Iran “raises obstacles” to building a closer strategic partnership. Yet, by voting against Iran at the International Atomic Energy Agency’s governing board meetings in 2005 and 2006, India invited Iranian reprisal in the form of cancellation of a highly favorable 25-year, $22-billion liquefied-natural-gas deal.

The Iran issue, in effect, has turned into a diplomatic litmus test: Will India stand up for its strategic and energy interests in the region, or will it be co-opted to serve the short-term interests of its friend, the U.S.? The U.S., for its part, must reconcile its Iran-related pressure on India, which is likely to continue despite the 180-day sanctions waiver, with the imperative to build deeper defense ties with India, thereby giving strategic heft to its declared “pivot” to Asia.

Brahma Chellaney is Professor of Strategic Studies at the Center for Policy Research in New Delhi and the author of “Asian Juggernaut” (HarperCollins) and “Water: Asia’s New Battleground” (Georgetown University Press).

(C) Project Syndicate, 2012.

Parched and Thirsty, yet Most Generous in Water Diplomacy

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Brahma Chellaney, The Times of India, July 3, 2012

Reciprocity is the first principle of diplomacy. But not for India, if one goes by its record. India has walked the extra mile to befriend neighbours, yet today it lives in the world’s most-troubled neighbourhood.

India’s generosity on land issues has been well documented, including its surrender of British-inherited extraterritorial rights in Tibet in 1954, the giving back of strategic Haji Pir to Pakistan after the 1965 war, and the similar return of territorial gains plus 93,000 prisoners after 1971 — all without securing any tangible reciprocity. Despite that record, there are still calls within India today for it to unilaterally cede control over the Siachin Glacier.

Even though India is reeling under a growing water crisis — with hospitals in its capital postponing surgeries because of lack of water and much of the country parched and thirsty — few seem to know that India’s generosity has extended not just to land but also to river waters.

The world’s most generous water-sharing pact is the 1960 Indus Waters Treaty, under which India agreed to set aside 80.52% of the waters of the six-river Indus system for Pakistan, keeping for itself just the remaining 19.48% share. Both in terms of the sharing ratio as well as the total quantum of waters reserved for a downstream state, this treaty’s munificence is unsurpassed in scale in the annals of international water treaties. Indeed, the volume of water earmarked for Pakistan is more than 90 times greater than the 1.85 billion cubic metres the US is required to release for Mexico under the 1944 US-Mexico Water Treaty.

The unparalleled water generosity has only invited trouble for India. Within five years of the Indus treaty, Pakistan launched its second war against India to grab the rest of Kashmir when India had still not recovered from its humiliating rout in 1962 at the hands of the Chinese.

Today, Pakistan expects eternal Indian munificence on water even as its military establishment (with blood of innocent Indians on its hands) continues to export terror. Yet, with all the water flowing downstream under the treaty, the same question must haunt the Pakistani generals as Lady Macbeth in William Shakespeare’s Macbeth: “Will all great Neptune’s ocean wash this blood clean from my hand?” Meanwhile, India’s own Indus basin, according to the 2030 Water Resources Group, confronts a massive 52% deficit between water supply and demand.

India’s 1996 Ganges treaty with Bangladesh guarantees minimum cross-border flows in the dry season — a new principle in international water law. In fact, the treaty almost equally divides the downstream Ganges flows between the two countries. Because of that precedent, India seems now ready to reserve almost half of the Teesta River waters for Bangladesh in what will be the world’s first water-sharing treaty of the 21st century.

Water is a state issue, not a federal matter, in the Indian Constitution, yet Prime Minister Manmohan Singh has sought to strong-arm West Bengal into accepting a Teesta River treaty on terms dictated by New Delhi. Existing water-sharing treaties elsewhere in the world, by contrast, do not come anywhere close to allocating half of all basin waters to the downstream state. Another key fact is that unlike Bangladesh, India is already a seriously water-stressed country. Whereas the annual per-capita water availability in Bangladesh averages 8,252 cubic metres, it has fallen to a paltry 1,560 cubic metres in India.

Lost in such big-hearted diplomacy is the fact that India is downriver to China, which, far from wanting to emulate India’s Indus or Ganges style water munificence, rejects the very concept of water sharing. Instead, the construction of upstream dams on international rivers such as the Mekong, Salween, Brahmaputra, Arun, Sutlej, Indus, Irtysh, Illy and Amur shows China is increasingly bent on unilateral actions, impervious to the concerns of downstream nations. Over the next decade, as if to underscore the strategic importance it gives to controlling water resources, China plans to build more large dams than the US or India has managed in its entire history.

By seeking to have its hand on Asia’s water tap through an extensive upstream infrastructure, China challenges India’s interests more than any other country’s. Although a number of nations stretching from Afghanistan to Vietnam receive waters from the Tibetan Plateau, India’s direct dependency on Tibetan waters is greater than of any other country. With about a dozen important rivers flowing in from the Tibetan Himalayan region, India gets almost one-third of all its yearly water supplies of 1,911 cubic kilometres from Tibet, according to the latest UN data.

In this light, it is fair to ask: Is India condemned to perpetual generosity toward its neighbours? This question has assumed added urgency because India has started throwing money around as part of its newly unveiled aid diplomacy — $1 billion in aid to Bangladesh, one-fifth as grant; $500 million to Myanmar; $300 million to Sri Lanka; $140 million to the Maldives; and generous new aid to Afghanistan and Nepal. If pursued with wishful thinking, such aid generosity is likely to meet the same fate as water munificence.

Generosity in diplomacy can yield rich dividends if it is part of a strategically geared outreach designed to ameliorate the regional-security situation so that India can play a larger global role. But if it is not anchored in the fundamentals of international relations — including reciprocity and leverage building — India risks accentuating its tyranny of geography, even as it is left holding the bag.

The writer is a geostrategist.

(c) The Times of India, 2012.

China’s Political Storm

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A Project Syndicate column internationally distributed.

As senior leaders are purged and retired provincial officials publicly call for Politburo members to be removed, it has become clear that China is at a crossroads. China’s future no longer looks to be determined by its hugely successful economy, which has turned the country into a world power in a single generation. Instead, the country’s murky and increasingly fractured politics are now driving its fate.

One need look no further than the ongoing power struggle in the run-up to this autumn’s planned leadership changes, or official figures showing that rural protests have been increasing at the same rate as China’s GDP. The sudden downfall of Bo Xilai — and the call from Yunnan Province for the removal of the two Politburo members closest to him — is just one example of the no-holds-barred infighting now taking place in Zhongnanhai, the closed leadership compound in Beijing. Indeed, the internecine squabbles are said to be so vicious that there have been rumors, denied by the regime, that the Communist Party’s congress at which a new president and prime minister are to be anointed this autumn, might be postponed.

The Party’s abrupt vilification of Bo after lauding him for his leadership in Chongqing has fueled public cynicism over his orchestrated downfall and laid bare the leadership’s thin ideological core. If China is to preserve its gains in global stature, it must avoid a political hard landing. For the time being, at least five different scenarios are conceivable.

Re-equilibration: The Party protects its legitimacy, keeps the military subordinate, and manages to put a lid on popular dissent. In other words, the status quo prevails for the foreseeable future. This is the least likely scenario, owing to deepening internal Party disagreements and rising popular discontent.

Implosion: This likelihood of political disintegration, economic collapse, and social disorder may be no higher than that of re-equilibration. The government’s fixation on weiwen, or stability maintenance, has resulted in China becoming the world’s only important country whose official internal-security budget is larger than its official national-defense budget.

This underscores the extent to which authorities have to carry out internal repression to perpetuate one-party rule and maintain control over the restive ethnic-minority homelands that make up more than 60% of China’s landmass. But it may also explain why one self-immolation in Tunisia helped to kindle the Arab Spring, whereas some three dozen self-immolations by Tibetan monks and nuns have failed to ignite a similar popular movement against the Chinese state.

The Soviet Union imploded because the party was the state, and vice versa. China, by contrast, has established strong institutional capacity, a multi-tiered federal structure, a tradition of civilian leadership turnover every ten years, and a well-oiled, sophisticated security apparatus that has kept pace with technological advances. Thus, China’s government can pursue a policy of wai song nei jin — relaxed on the outside, vigilant internally.

Guided reform: A process of gradual political change begins, in keeping with outgoing Premier Wen Jiabao’s warning that without “urgent” reforms, China risks turmoil and disruption of economic growth. Can China emulate the recent example of neighboring Myanmar (Burma), which has initiated significant, if still tenuous, political reforms?

As the political heirs of the country’s Communist revolutionaries, the third-generation leaders that are taking over the reins of power in China may possess a strong pedigree, but they are also scarred and limited by it. These so-called princelings are trapped in the same political culture that led to the death of millions of Chinese and the continuing repression of opponents (real or imagined). They do not look like political reformers in the slightest.

Great leap backward: A new “Cultural Revolution” erupts, as the clique in power ruthlessly seeks to suppress dissent within and outside the establishment. As the Dalai Lama recently warned, there are still plenty of “worshippers of the gun” in power in China. Indeed, such is China’s political system that only the strongest advance. One fallen princeling, Bo, has been accused of cruelty and corruption — traits that are endemic in China’s cloistered but fragmented oligarchy, which values family lineage and relies on networks of allies.

Praetorian takeover: The People’s Liberation Army rules from behind a civilian mask, increasingly calling the shots with government officials, who are beholden to it. While the civilian leadership has become diffuse (every Chinese leader since Mao Zedong has been weaker than his predecessor), the military has enjoyed greater autonomy and soaring budgets since 1990. Indeed, the Party, having ceased to be a rigid monolith obedient to a single leader, has become dependent on the military for its political legitimacy and to ensure domestic order.

The PLA’s growing political clout has been manifest in the sharpening power struggle within the Party. In recent weeks, an unusual number of senior military officers have published articles in official newspapers calling for Party discipline and unity, and alluding to the military’s role in containing the infighting.

Another development is the increasing tendency of military generals to speak out of turn on strategic issues and undercut diplomatic strategy. The simple truth is that the foreign ministry is the Chinese government’s weakest branch, often overruled or simply ignored by the security establishment, which is ever ready to upstage even the Party.

China’s internal politics has a bearing on its external policy. The weaker the civilian leadership has become, the more China has been inclined to discard Deng Xiaoping’s dictum tao guang yang hui (hide brightness, nourish obscurity). China has lately taken more to the spotlight than to the shadows. Under any plausible scenario, a restrained and stable Chinese foreign policy may become more difficult.

Brahma Chellaney, Professor of Strategic Studies at the New Delhi-based Center for Policy Research, is the author of Asian Juggernaut and Water: Asia’s New Battleground.

(c) Project Syndicate, 2012.

Is the U.S.-India relationship losing steam?

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Brahma Chellaney, Japan Times, June 7, 2012

WASHINGTON — Was the U.S.-India strategic partnership oversold to the extent that it has failed to yield tangible benefits for the United States? Even as Secretary of State Hillary Clinton has just held detailed discussions in New Delhi, an increasing number of analysts in Washington have already concluded that the overhyped relationship is losing momentum.

The skeptics cite two high-visibility issues in particular: India’s rejection of separate bids by Lockheed Martin Corp. and Boeing Co. to sell 126 fighter-jets, and New Delhi’s reluctance to snap energy ties with Iran. The discussion over these issues, however, obscures key facts.

Take the aircraft deal.  Despite that setback, U.S. firms have clinched several other multibillion-dollar arms deals in recent years. These contracts have been secured on a government-to-government basis, without any competitive bidding.  But in the one case where India invited bids, American firms failed to make it beyond the competition’s first round because they did not match the price and other terms offered by the French manufacturer of the Rafale aircraft and the European consortium that makes the Eurofighter Typhoon.

The most-startling yet little-publicized fact is America’s quiet emergence as the largest arms seller to India. In the decade since President George W. Bush launched the vaunted U.S.-Indian strategic partnership, India has fundamentally reoriented its defense procurement, moving away from its traditional reliance on Russia. Indeed, nearly half of all Indian defense deals by value in recent years have been bagged by the U.S. alone, with Israel a distant second and Russia relegated to the third slot.

Given that India has become the world’s largest arms importer and the United States remains the biggest exporter, U.S. firms are set to secure more contracts in India, which plans to spend more than $100 billion over the next four years to upgrade its military capabilities, including by buying submarines, heavy lift and attack helicopters, howitzers, and tanks.

Now consider the Iran issue. Just as the Indian rejection of the Boeing’s F/A 18 and Lockheed-Martin’s F-16 bids has made big news but the U.S. landing of multiple arms contracts has received little notice, India’s reluctance to publicly support U.S. energy sanctions on Iran has been in the spotlight but not the quiet Indian strategy since the late 1990s to let the share of Iranian oil in India’s energy imports gradually decline — a trend that has seen the importance of Iranian oil supplies for India considerably weaken.

Few in India consider Iran a friend. But given India’s troubled neighborhood, with the country wedged in an arc of problematic states, New Delhi is reluctant to rupture its ties with Iran, its gateway to Afghanistan — the top recipient of Indian aid. India already has paid a heavy price for taking America’s side on some critical issues in its long-running battle against Iran, even though Washington doesn’t take India’s side in its disputes with China or Pakistan.

The Bush administration persuaded India not to conclude any new long-term energy contracts with Iran, and — in return for a civil nuclear deal with the U.S. — abandon its plan to build a gas pipeline from Iran. New Delhi, by voting against Iran at the International Atomic Energy Agency’s governing board in 2005 and 2006, invited Iranian reprisal in the form of cancellation of a 25-year, $22-billion liquefied natural gas deal which had terms highly favorable to India. That deal’s scrapping alone left India poorer by several billion dollars.

Now the U.S. energy embargo against Iran has pushed international oil prices higher, significantly increasing India’s oil bill. The embargo also threatens to undercut India’s import-diversification strategy by making it place most of its eggs in the basket of the Islamist-bankrolling, Saudi Arabia-led oil monarchies that continue to play a role in South Asia detrimental to Indian interests. In fact, thanks to the U.S. embargo against Iran, the swelling coffers of the iron-fisted oil sheikhdoms are set to overflow, increasing their leverage in the region and beyond.

Lost in the U.S. public discussion is an important fact — the declining share of Iranian crude in India’s total oil imports as part of a conscious Indian effort to reduce supply-disruption risks linked with the lurking potential for Iran-related conflict. Since 2008 alone, Iranian oil imports have swiftly fallen from 16.4 percent to 10.3 percent. Given India’s soaring oil imports and search for new sources of supply, the Iranian share is set to decline further, even without India’s participation in the U.S. embargo.

Make no mistake: India shares U.S. objectives on Iran but the exigencies of its regional situation compel it to toe a more cautious line.

The repositioning of the U.S.-India relationship was never intended to be transactional. Rather it was designed as an important geostrategic move to underpin Asian security and serve the long-term U.S. and Indian interests. But even if the relationship were viewed in transactional terms, the U.S. has reaped handsome dividends.

On Iran, the right course for U.S. policy would be to encourage India to continue reducing Iranian oil imports by granting it a waiver from American sanctions law — as Washington has to Japan and nine other countries — and by helping to finance the retrofitting of Indian refineries that presently have a technical capacity to process only Iranian oil.

More fundamentally, just as the Bush administration exaggerated the importance of a single deal with India, contending that the nuclear deal would be fundamentally transformative, it is an overstatement that the U.S.-India relationship today is losing momentum. The geostrategic direction of the relationship is irreversibly set — toward closer collaboration. Even trade between the countries has continued to grow impressively, from $9 billion in 1995 to $100 billion in 2011. While it is too much to expect a congruence of U.S. and Indian national-security objectives in all spheres, the two countries are likely to deepen their cooperation in areas where their interests converge, such as ensuring Asian power equilibrium.

Barack Obama had stroked India’s collective ego by inviting Indian Prime Minister Manmohan Singh for his presidency’s first state dinner, leading to the joke that while China gets a deferential America and Pakistan secures billions of dollars in U.S. aid periodically, India is easily won over with a sumptuous dinner and nice compliments.

The mutual optimism and excitement that characterized the blooming U.S.-Indian ties during the Bush years, admittedly, has given way to more realistic assessments as the relationship has matured. Geostrategic and economic forces, however, continue to drive the two countries closer. Indeed, Obama’s recent pivot to Asia has made closer U.S. strategic collaboration with India critical.

(c) The Japan Times, 2012.

A Dam-Building Race in Asia: How to Contain the Geopolitical Risks

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Brahma Chellaney

A paper published by The Transatlantic Academy, Washington, DC, May 2012

Introduction 

Asia’s phenomenal economic rise has attracted a lot of attention in international policy circles but the sharpening water competition this growth has triggered is less well known. Water has emerged as a source of increasing competition and underlying discord between many Asian nations, spurring new tensions over the resources of transnational rivers. Asia’s fastest-growing economies are all at or near water-stressed conditions, underscoring how water shortages threaten to hamper the continent’s continued rapid economic growth. For investors, the Asian water crisis carries risks that are at least as potentially damaging as nonperforming loans, real estate bubbles, and political corruption.

Dam building on transnational rivers is at the heart of the inter-riparian tensions in Asia. Asia is already the world’s most dam-dotted continent: It has more dams than the rest of the world combined. Yet the numerous new dam projects in Asia show that the damming of rivers is still an important priority for policymakers. In the West, dam building has largely petered out. In Asia, however, the construction of new dams continues in full swing.

Like arms racing, “dam racing” has emerged as a geopolitical concern in Asia, where the world’s fastest economic growth is being accompanied by the world’s fastest increase in military spending and the world’s fiercest competition for natural resources, especially water and energy. As riparian neighbors compete to appropriate resources of shared rivers by building dams, reservoirs, barrages, irrigation networks, and other structures, the relationships between upstream and downstream states are often characterized by mutual distrust and discord.

This paper warns that just as the scramble for energy resources has defined Asian geopolitics since the 1990s, the struggle for water is now likely to define many inter-country relationships. At a time when many territorial disputes and separatist struggles in Asia are being driven by resource issues — extending from the energy-rich South and East China Seas to the water-rich Tibet and Kashmir — water indeed is becoming the new oil. But unlike oil — dependence on which can be reduced by either tapping other sources of energy or switching to other means of generating electricity — there is no substitute for water. Asian economies are the world’s leading importers of resources like mineral ores, hydrocarbons, and timber, importing them from distant lands. But they have no such import choice on water.

The paper, drawing on the author’s book on Asian water challenges published last fall by the Georgetown University Press, examines how the rising geopolitical risks arising from the dam-building competition can be stemmed. It does so by examining the broader water tensions and competition, which center on four distinct zones: China and its neighbors; South Asia; Southeast Asia; and Central Asia, where the Soviet Union’s disintegration left a still-festering water discord among the five so-called “stans” — Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan, and Turkmenistan.

The overexploitation of river resources has only promoted unbridled groundwater extraction, resulting in rapidly falling water tables across much of Asia. The scope of this paper, however, is limited to analyzing how the resources of shared rivers have become the target of rival appropriation plans, in what can be described as a silent hydrological warfare. Driving the rival dam-building plans and the accompanying water nationalism is the notion that sharing waters is a zero-sum game. The danger that the current or new riparian disputes may escalate to conflict looms large on the Asian horizon, with important implications for Asia’s continued rapid economic-growth story and for inter-riparian relations.

Different continents’ water resources

The challenges posed by the frenetic dam building, however, come with new opportunities to break with business as usual and adopt water conservation and efficiency as well as cooperative approaches in order to help sustainably manage shared water resources and underpin mutual development goals and environmental security. What Asia  needs is institutionalized water cooperation between co-riparian states, with clear rules on building dams on transnational rivers, so as to minimize apprehensions and promote greater regional cooperation.

Only cooperative water institutional mechanisms can help mitigate the risks arising from the rush to dam rivers and create an upstream hydroengineering infrastructure that could potentially arm upstream states with tremendous political and economic leverage over downriver nations. Such cooperation will need to be based on transparency, information sharing, independent environmental impact assessment, dispute-settlement mechanisms, water pollution control, and a mutual commitment to refrain from undertaking projects that could materially diminish transboundary river flows.

Download the full paper here.

Water Diplomacy: Skating on Thin Ice

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Brahma Chellaney, The Economic Times, May 10, 2012

The Teesta River flowing through the northern part of India’s West Bengal state

With power in India shifting to the states due to an increasingly weak central government, Secretary of State Hillary Clinton chose Calcutta as the first stop of her India tour to advance U.S. foreign-policy interests. In a televised interview before meeting with West Bengal Chief Minister Mamta Banerjee, Ms. Clinton pushed for India permitting foreign direct investment in multi-brand retail and for an “amicable” water-sharing arrangement with Bangladesh on the Teesta River — issues stalled by Ms. Banerjee’s opposition.

The art of persuasion and co-option is central to leadership — a capability Prime Minister Manmohan Singh has failed to demonstrate, even as his politically precarious government lurches from one crisis to another. The result has been a series of delays on critical decisions as well as policy reversals — all conveniently blamed on allies, including powerful regional satraps. This tendency to pass the buck has prompted foreign leaders to directly woo key chief ministers.

Take the water issue. The Indian Constitution has left water as a state-level subject, rather than making it a federal issue. Yet Singh’s government has sought to dictate the terms of a Teesta water-sharing treaty with Bangladesh to West Bengal, although that state’s interests are directly at stake. Indeed, New Delhi first negotiated the terms of the pact with Dhaka — generously loaded in Bangladesh’s favour — and then sought to present West Bengal with a fait accompli.

Respect for states and their interests is the essence of federalism.  Yet this inclination to ride roughshod over states harks back to the days when the central government was exceptionally strong.

Jawaharlal Nehru ignored the interests of Jammu and Kashmir and, to a lesser extent, Punjab when he signed the 1960 Indus Waters Treaty, under which India bigheartedly agreed to the exclusive reservation of the largest three of the six Indus-system rivers for downstream Pakistan. In effect, India signed an extraordinary treaty indefinitely setting aside 80.52 percent of the Indus-system waters for Pakistan — the most generous water-sharing pact thus far in modern world history.

In fact, the volume of waters earmarked for Pakistan from India under the Indus treaty is more than 90 times greater that what the U.S. is required to release for Mexico under the 1944 U.S.-Mexico Water Treaty, which stipulates a minimum transboundary delivery of 1.85 billion cubic meters of the Colorado River waters yearly. While Ms. Clinton’s advocacy of a Teesta treaty is understandable, the U.S. hasn’t set a good example in the Colorado Basin. The  waters of the once-mighty Colorado River are siphoned by seven American states, leaving only a trickle for Mexico.

The Indus treaty was negotiated in a period when water shortages were relatively unknown in most parts of India. Nehru did not envisage that water resources would come under serious strain due to developmental and population pressures. Today, as the bulk of the Indus system’s waters continue to flow to an adversarial Pakistan waging a war by terror, India’s own Indus basin, according to the 2030 Water Resources Group, is reeling under a massive 52 percent deficit between water supply and demand.

Worse still, the Indus treaty has deprived Jammu and Kashmir of the only resource it has — water. The state’s three main rivers — the Chenab and the Jhelum (which boast the largest cross-border discharge of all the six Indus-system rivers) and the main Indus stream — have been reserved for Pakistan’s use, thereby promoting alienation and resentment in the Indian state.

This led the Jammu and Kashmir state legislature to pass a bipartisan resolution in 2002 calling for a review and annulment of the Indus treaty. To help allay popular resentment in the state over the major electricity shortages that are hampering its development, the central government subsequently embarked on hydropower projects like Baglihar and Kishenganga. But Pakistan — as if seeking to perpetuate the popular alienation in the Indian state — took the Baglihar project to a World Bank-appointed international neutral expert and Kishenganga to the International Court of Arbitration, which last year stayed all further work on the project.

The proposed Teesta pact suggests that India has learned no lesson from its experience over the Indus treaty. The Teesta originates in Sikkim state and meets the Brahmaputra in Bangladesh. The long-term interests of northern West Bengal, for which the Teesta is a lifeline, must be protected.

Water, as an indispensable resource that is increasingly in short supply, tends to raise emotive and politically surcharged issues. Singh’s government has unwisely brought India under pressure by portraying Ms. Banerjee as the sole holdout on the Teesta treaty. It has also fed the media attacks on Ms. Banerjee over that issue. Meanwhile, seeking to up the ante by latching on Ms. Clinton’s comments, Bangladesh Foreign Minister Dipu Moni has warned that Indo-Bangladesh ties “will take a huge hit” if India does not deliver on the Teesta issue.

India, which has just announced a decision to magnanimously write off $200 million of its $1 billion new loan to Dhaka, must continue to generously help Bangladesh — but on the basis of concrete reciprocity. India is already a party to a water-sharing treaty with Bangladesh involving a bigger river, the Ganges.

Its 1996 Ganges treaty guarantees Bangladesh minimum cross-border flows in the dry season — a new principle in international water relations. In fact, the treaty almost equally divides the downstream Ganges flows between the two countries. In concluding the treaty, India climbed down from its long-stated position that it needed a minimum of 40,000 cubic feet of water per second of time (“cusecs”) to flush silt from the Calcutta port. India settled for each side getting 35,000 cusecs of water in alternative ten-day periods during the driest period from March to May.

The treaty helped bury the hatchet over India’s diversion of water through the Farakka Barrage to a Ganges tributary, the Bhagirathi-Hooghly, to help flush silt and keep the Calcutta Harbour operational during the dry season. The treaty’s complex water-sharing arrangement is pivoted on joint oversight of flows to help build mutual trust. And unlike the Indus treaty, which was brokered by the U.S. and the World Bank, the Ganges treaty emerged without the involvement of a third party, despite a U.S. offer of mediation.

Bangladesh and India are also likely to sign — without any third-party role — a Teesta treaty in what will be the world’s first water-sharing pact of the 21st century. Bangladesh insists it get half of the Teesta waters, although most of the river’s waters are generated in India. Existing water-sharing treaties elsewhere in the world do not come anywhere close to allocating half of all waters to the downstream state. India has the dubious distinction of signing the most generous water-sharing pacts with downstream states, even as it has failed to get upstream China to  accept the very concept of water sharing.

India faces difficult choices on water. Unlike Bangladesh, it is already a water-stressed country. Whereas the per-capita water availability in Bangladesh is 8,252 cubic meters per year, according to United Nations data, it has fallen to a paltry 1,560 cubic meters in India.

(c) The Economic Times, 2012.

The Resistible Rise of Asia?

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A favorite theme in international debate nowadays is whether Asia’s rise signifies the West’s decline. But the current focus on economic malaise in Europe and the United States is distracting attention from the many serious challenges that call into question Asia’s continued success.

To be sure, today’s ongoing global power shifts are primarily linked to Asia’s phenomenal economic rise, the speed and scale of which have no parallel in world history. With the world’s fastest-growing economies, fastest-rising military expenditures, fiercest resource competition, and most serious hot spots, Asia obviously holds the key to the future global order.

But Asia faces major constraints. It must cope with entrenched territorial and maritime disputes, such as in the South China Sea; harmful historical legacies that weigh down its most important interstate relationships; increasingly fervent nationalism; growing religious extremism; and sharpening competition over water and energy.

Moreover, Asia’s political integration badly lags behind its economic integration, and, to compound matters, it has no security framework. Regional consultation mechanisms remain weak. Differences persist over whether a security architecture or community should extend across Asia, or be confined to an ill-defined “East Asia.”

One central concern is that, unlike Europe’s bloody wars of the first half of the twentieth century, which made war there unthinkable today, the wars in Asia in the second half of the twentieth century only accentuated bitter rivalries. Several interstate wars have been fought in Asia since 1950, when both the Korean War and the annexation of Tibet started, without resolving the underlying Asian disputes.

To take the most significant example, China staged military interventions even when it was poor and internally troubled. A 2010 Pentagon report cites Chinese military preemption in 1950, 1962, 1969, and 1979 in the name of strategic defense. There was also China’s seizure of the Paracel Islands from Vietnam in 1974, and the 1995 occupation of Mischief Reef in the Spratly Islands, amid protests by the Philippines. This history helps to explain why China’s rapidly growing military power raises important concerns in Asia today.

Indeed, not since Japan rose to world-power status during the reign of the Meiji Emperor (1867-1912) has another non-Western power emerged with such potential to shape the global order. But there is an important difference: Japan’s rise was accompanied by the other Asian civilizations’ decline. After all, by the nineteenth century, Europeans had colonized much of Asia, leaving in place no Asian power that could rein in Japan.

Today, China is rising alongside other important Asian countries, including South Korea, Vietnam, India, and Indonesia. Although China now has displaced Japan as the world’s second largest economy, Japan will remain a strong power for the foreseeable future. On a per capita basis, Japan remains nine times richer than China, and it possesses Asia’s largest naval fleet and its most advanced high-tech industries.

When Japan emerged as a world power, imperial conquest followed, whereas a rising China’s expansionist impulses are, to some extent, checked by other Asian powers. Militarily, China is in no position to grab the territories that it covets. But its defense spending has grown almost twice as fast as its GDP. And, by picking territorial fights with its neighbors and pursuing a muscular foreign policy, China’s leaders are compelling other Asian states to work more closely with the US and each other.

In fact, China seems to be on the same path that made Japan an aggressive, militaristic state, with tragic consequences for the region – and for Japan. The Meiji Restoration created a powerful military under the slogan “Enrich the country and strengthen the military.” The military eventually became so strong that it could dictate terms to the civilian government. The same could unfold in China, where the Communist Party is increasingly beholden to the military for retaining its monopoly on power.

More broadly, Asia’s power dynamics are likely to remain fluid, with new or shifting alliances and strengthened military capabilities continuing to challenge regional stability. For example, as China, India, and Japan maneuver for strategic advantage, they are transforming their mutual relations in a way that portends closer strategic engagement between India and Japan, and sharper competition between them and China.

The future will not belong to Asia merely because it is the world’s largest, most populous, and fastest-developing continent. Size is not necessarily an asset. Historically, small, strategically oriented states have wielded global power.

In fact, with far fewer people, Asia would have a better balance between population size and available natural resources, including water, food, and energy. In China, for example, water scarcity has been officially estimated to cost roughly $28 billion in annual industrial output, even though China, unlike several other Asian economies, including India, South Korea, and Singapore, is not listed by the United Nations as a country facing water stress.

In addition to its growing political and natural-resource challenges, Asia has made the mistake of overemphasizing GDP growth to the exclusion of other indices of development. As a result, Asia is becoming more unequal, corruption is spreading, domestic discontent is rising, and environmental degradation is becoming a serious problem. Worse, while many Asian states have embraced the West’s economic values, they reject its political values.

So make no mistake. Asia’s challenges are graver than those facing Europe, which embodies comprehensive development more than any other part of the world. Despite China’s aura of inevitability, it is far from certain that Asia, with its pressing internal challenges, will be able to spearhead global growth and shape a new world order.

Brahma Chellaney, Professor of Strategic Studies at the New Delhi-based Center for Policy Research, is the author of Asian Juggernaut and Water: Asia’s New Battleground. Full profile

(c) Project Syndicate, May 2012.