India and the SAARC: Implications for the neighbourhood
By: Amb (Retd) Anil Trigunayat
Indian Institute of Technology (IIT), Bhubaneswar
Date: April 07, 2017
Esteemed Director of the IIT, distinguished faculty and dear students
It is indeed a great pleasure for me to interact with you today in this historic and beautiful city of Bhubaneswar which I had visited in 1985 first time while on a posting to Dhaka. Incidentally this was the year SAARC was launched in Dhaka which was initially mooted by the President Zia of Bangladesh. I am so grateful to the University Administration for the kind invitation and excellent hospitality as well as to the XPD Division of the Ministry of External Affairs for arranging this interaction. I am happy that we are going to talk about SAARC and -its relevance and future with India as its engine of success. It is a very crucial subject pertaining to a very important and strategic region in the world. During the past two years or so alone several changes have taken place that impact on the well-being or otherwise of the region. I would touch upon the genesis of SAARC, its successes and failures, key constraints to further integration and the external factors impinging on its growth and viability as a successful regional grouping while referring to the impact of India, China and Pakistan on its growth or lack thereof.
South Asia though often loosely defined comprises small island like Maldives to India a country of continental proportions. Its short six or seven decades old political and independent history has witnessed the amazing functioning of the largest democracy in India to Kingdoms in Bhutan and Nepal to political upheavals through frequent coup d’états in some countries in the group as well as resurgence of democratic communism in Nepal. Besides two of the major countries have nuclear capabilities that is further compounded by the already nuclear Chinese in the larger neighbourhood trying to keep their stilted balance by proxy through Pakistan. Above all almost all countries have suffered and witnessed extremism and terrorism often exported from outside and across the borders though some have in the process become the havens of terrorist groups and camps as part of their unstated policy in order to serve their myopic untenable foreign policy goals and objectives. Prevalence of poverty , governance issues , underdevelopment and deep seated socio-political divisions and occasional territorial disputes in countries and between countries in the region have been the major challenges for the respective leaderships .Given its geo-political and geo strategic location with absolutely essential maritime trade lanes in the Indian ocean and Arabian sea the countries have fought or had problems with one another or have had proxy wars and conflicts through and sometimes for the cold war adversaries during the decades where efforts were made to contain the resurgent futuristic outcomes of new powers like China and India . It is arguably a given that 21st century is going to be the Asian century but the road is going to be rough and fraught with occasionally insurmountable pot holes as those used to enjoying the neo colonial power paradigms may not allow the new writ so easily inscribed. Besides the trust deficit among the constituents of South Asia remains unabated. No one wants to let the power space go as the politico- military history suggests. But definitely the economic levers are moving southwards towards Asia in general and South and East Asia in particular which ought to dictate the future course of international pivot and interaction.
Regional cooperation with limiting bilateral conflicts and dissonance is natural and desirable for peace, growth, stability and development. Unilateralism is also ceding space to multilateralism in the international discourse. In the 20th century several of these regional efforts were initiated. Hitherto EU is perhaps the best and most successful experiment where pan regional institutions have played an important role in achieving the high level of integration, among its 28 members , despite huge road blocks and second world war and cold war baggage . Over six decades it graduated from the Coal Community to Customs Union to Common Market, EC, Single Currency, Schengen visa regime and finally the EU. Some of them like the UK and Nordic countries remained out of the purview of the one or the other important initiative be it the common currency or the visa regime. Overcoming the concerns and developmental gaps and demands for enhanced support of individual constituents would always pose an existential challenge to any regional group. There are many such arrangements which are struggling and marching on at various levels of integration like NAFTA, MERCOSUR and ASEAN prominent among them. As you would have seen BREXIT (UK) from the EU and President Trump’s walling of the borders with Mexico including the proposed taxation on products imported from their southern neighbour have created new challenges for the regional outfits. SAARC is no exception to this dichotomy and paradox.
With a combined landmass of 5.12 million square kilometres, a total population exceeding 1.65 billion, more than 60% of whom are below thirty, and an aggregate GDP of over US $6 trillion in PPP terms, the eight- member SAARC grouping was expected to play a critical role in the new Asian century ,provided it could overcome problems of poor domestic governance, export of terror by some, of sporadic outbursts of ethnic, communal and sectarian conflicts and unresolved border disputes gifted by the colonial past.
The South Asian region since the independence in 1940s did follow protectionist policies with state controls of economic activity, focus on self-reliance with less dependence on foreign investment through tariff and non- tariff barriers. Sri Lanka led the economic liberalising in 1970s and others adopted the new globalisation route in 1980s and 90s. The process of economic reforms in most countries continues at a varied pace. It was also a prerequisite for achieving a meaningful regional institutionalised mechanism. Hence the seven South Asian nations that included Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka agreed upon the creation of a trade bloc called South Asian Association of Regional Cooperation (SAARC) in 1985 and to provide a platform for the SAARC Charter whose very first Article enunciated as follows;
We, the Heads of State or Government of BANGLADESH, BHUTAN, INDIA, MALDIVES, NEPAL, PAKISTAN and SRI LANKA;
"Desirous of promoting peace, stability, amity and progress in the region through strict adherence to the principles of the UNITED NATIONS CHARTER and NON-ALIGNMENT, particularly respect for the principles of sovereign equality, territorial integrity, national independence, non-use of force and non-interference in the internal affairs of other States and peaceful settlement of all disputes; people of South Asia to work together in a spirit of friendship, trust and understanding. "
The SAARC Charter further stipulates that decisions at all SAARC fora are to be taken on the basis of unanimity. Bilateral and contentious issues are explicitly excluded from its deliberations and cooperation is based on sovereign equality, territorial integrity, political independence and non-interference in each other’s internal affairs. Ironically these provisions have their own cumbersome tale and have posed effective restraint on SAARC’s functioning since they have been observed more in violation than compliance.
Dhaka Declaration of 13th SAARC Summit in November 2005 included Afghanistan in the forum as its 8th newest member. There are currently 9 Observers in SAARC (China, EU, Iran, Republic of Korea, Australia, Japan, Mauritius, Myanmar and US). There is a moratorium on admission of new observers or upgrading observers to dialogue partner status, pending greater clarity on the nature and direction of SAARC’s relationships with observers.
After a decade of establishment of SAARC, a regional economic cooperation agreement called South Asian Preferential Trade Agreement (SAPTA) came into existence in 1995 that led to higher level of intra‐regional trade liberalization and economic cooperation among the member countries. SAPTA sought to ensure preferential treatment through reduction of import tariffs on eligible items while ensuring special and the most favorable treatment to the least developed countries in the region. To further strengthen the regional economic cooperation, South Asian Free Trade Agreement (SAFTA) became a reality in 2006. However, most members continue to prefer other bilateral arrangements and more liberal free trade agreements at the expense of SAFTA which stunted the attraction and pace of further regional integration. Moreover product diversification and member countries’ export structures, to effectively use the trade route in the region, have been missing. SAFTA aimed to reduce tariffs to 0 to 5% over ten year period. It required member countries like India, Pakistan and Sri Lanka to set their custom tariff under 5% by 2013, where as it permitted LDCs like Afghanistan, Bangladesh, Bhutan, Maldives and Nepal longer time frames to reduce or eliminate tariffs by 2016.Intra‐regional trade among SAARC countries has been one of the lowest for a region. SAFTA accounts for only around 10% of the total regional trade even after 30 years of the establishment of SAARC and despite the existence of logistical advantages. The cumulative figure of intra-SAARC trade flows under SAFTA was around US$ 3 billion during 2013-2014 India’s trade with South Asia accounts for about 5 % of its global trade. This is in contrast to the Intra-regional trade of roughly 65 per cent of European Union's total trade; 51 per cent in the North American Free Trade Agreement (NAFTA) area; and 26 per cent in the Association of South East Asian Nations (ASEAN) and 16 per cent in the Latin American trade bloc, Mercosur. Same was the case with FDI. Though the FDI received by SAARC countries have significantly improved over a period of three decades, more than 84% of FDI was received only by India in 2012 compared to Nepal’s about 0.16%. South Asian countries will need to address not only economic factors such as trade facilitation and infrastructure development, but also some non‐economic factors like creating political will and building confidence so that the road map of converting SAPTA into SAFTA and further into South Asian Customs Union and finally into South Asian Economic Union by the year 2020 could hopefully be achieved.
However over the three decades, SAARC has been able to achieve following several key objectives apart from SAPTA & SAFTA ;
- SAARC Agreement on Trade in Services (SATIS) came into force in December 2012. The Agreement provides for expanding intra-regional investments, trade liberalization in the services sector, etc. The 5 Least Developed Countries in the region, viz. Afghanistan, Bangladesh, Bhutan, Maldives and Nepal, are accorded special and differential treatment, commensurate with their developmental needs. Trade in Services is to commence after Schedules of Specific Commitments are finalised. Bangladesh, Bhutan, India and Nepal have prepared their final schedules of commitments; other countries are in the process of doing so. India is ready with its schedules of commitments for early operationalization of SAARC Agreement on Trade in Services(SATIS). Our approach is to lead in tariff reduction and eliminate sensitive lists in a calibrated, yet, progressive way.
- The SAARC Framework Agreement on Energy Cooperation (Electricity) was signed at the 18th SAARC Summit in Kathmandu. This Agreement enables cross-border trade of electricity on voluntary basis subject to the laws, rules and regulations of the respective members. It, inter alia, enables Member states to negotiate the terms, conditions, payment security mechanism and tenure of electricity trade. The Agreement was ratified on 30th July 2015 by India. Other Member States are in the process of ratifying it. Implementation of the agreement should contribute to mitigating electricity shortages, including in our North East.
- The 18th, SAARC Summit was held in Kathmandu, Nepal on 26-27 November 2014, preceded by the SAARC (Foreign) Ministers' Meeting (25 November). The "Kathmandu Declaration” called for reinvigoration of regional cooperation and revitalization of SAARC as an effective vehicle to fulfill developmental aspirations of the peoples of South Asia. It also called for early operationalization of SATIS (SAARC Agreement on Trade in Services), strengthening of Social Window of SAARC Development Fund (SDF) and operationalization of its Economic and Infrastructure Windows, upgrading of the SAARC TB Reference Laboratory in Kathmandu, to a supra-national Reference Laboratory with necessary funding from SDF. All the three windows of SDF have since been operationalized and India has contributed US$ 1.05 million for up gradation of the STAC laboratory to a supra-national laboratory.
- SAARC Motor Vehicles Agreement and the SAARC Railways Agreement were endorsed by the Inter- Governmental Group on Transport (IGGT) meeting held in New Delhi on 30 September 2014. However these agreements could not be signed at the 18th SAARC Summit, as Pakistan did not complete its internal procedures. India has also called for a Regional Air Services Agreement in SAARC.
- The SAARC Agreement on Rapid response to Natural Disasters was signed during the 17th SAARC Summit in November 2011 with the aim of institutionalizing the regional cooperation on disaster response among SAARC countries. India has also organized a number of workshops/seminar/ training programmes on disaster management for the SAARC member states. India very rapidly rendered assistance and expertise to Nepal last year during the severe earth quakes there.
- Over the past few years, new regional institutions have been created under SAARC, such as the SAARC Development Fund (SDF) in Thimphu, South Asian University (SAU) in New Delhi, and SAARC Arbitration Council (SARCO) in Islamabad, SAARC Regional Standards Organisation (SARSO) in Dhaka.
India is SAARC‘s engine of growth.
India, given its size, population, economy and central location is indeed the pivot of SAARC . It has common land/sea borders with six of the seven other members which places it in an unquestionable leadership role. Unfortunately, due to these very reasons often India willy-nilly becomes the target for its SAARC neighbours who suffer from the "Big Brother Syndrome”.
The coming to power of the new NDA government in India in May, 2014 accorded greater priority to regional cooperation under SAARC. The presence of all the SAARC leaders at the swearing-in ceremony of Prime Minister Narendra Modi and the new government was an unprecedented and a welcome change. Prime Minister Modi made it clear that making the region peaceful, stable and prosperous is one of his main objectives. He also emphasizes the desirability of all SAARC countries working together for ending the endemic poverty in the region.PM Modi has already been on successful visits to Afghanistan, Bangladesh ,Bhutan, Myanmar, Nepal and Sri Lanka and even to Pakistan and China. India also hosted leaders from several of our neighbours. In fact as I speak to you Mrs Sheikh Hasina, Prime Minister of Bangladesh is in India and wide ranging cooperation is in the pipeline.
Apart from thwarting the Pakistani " Negative veto and approach " to key projects India is following on parallel sub-SAARC and broader regional initiatives like the BIMSTEC and BBIN that eventually are expected to inject synergies into the SAARC cooperation process by associating other neighbours of India like China and Myanmar along with SAARC members like Bangladesh, Bhutan, Nepal and Sri Lanka. PM Modi went an extra mile and met PM Nawaj Sharif an unprecedented five times in less than 18 months including his unscheduled visit to Lahore on December 25,2015 to felicitate PM Sharif on his birthday and his daughter’s ,marriage . This combined with interactions at senior official levels gave hope that our initiative will lead to a positive and long term state of peace and friendship between the two countries but that was not to be simply as Pakistani leadership refrained from reciprocating the Indian gestures and also from taking any action against the groups of international terrorists targeting India from their soil. In fact much to the chagrin of Indians the Pak based terrorists carried out the Pathankot and Uri attacks immediately after the goodwill gestures by India ,while no progress in resolution of the 26/11 Mumbai attacks was frustrating enough. India made it clear that "Talks and Terror can not go hand in hand”. Hence India was forced to cancel participation at the November 2016, 19th SAARC Summit in Islamabad citing the absence of a conducive environment and non-cooperation in combating cross border terrorism by Pakistan. Other countries followed suit and the Summit was postponed. I,however, believe that if at all any major break through with Pakistan can be achieved it can only be done under Prime Minister Modi ,who does think out of the box .
India remains steadfast and committed to SAARC and has made significant contributions to this asymmetric relationship – as per MEA data some of which are;
- India because of its geography, economy, international stature and commitment to the region is central to SAARC. The SAARC region has acute asymmetrical power balance as India encompasses more than 75 percent of the region’s GDP and more than 70 percent of population, territorial dependency in India is high and it possesses enormous military power compared to other countries in the region. India has a special responsibility flowing from the geography of the region and the size of its economy. Taking the region along in our march towards progress and prosperity is both an economic and demographic imperative. India has so far contributed over US$ 530.- million to SAARC institutions for socio-economic development.
- The unprecedented invitation by Prime Minister Modi to the leaders of SAARC for the swearing-in ceremony on 26th May 2014 indicated India’s intent and commitment to building cordial, friendly and inclusive ties with the countries of South Asia. Prime Minister also held substantive bilateral meetings with each of the visiting leaders
- The first engagement of the Prime Minister with SAARC was at the XVIII Summit in Kathmandu in November, 2014. India made a number of unilateral offers at the Summit, notably, to build a SAARC Satellite, monitor polio-free countries and provide polio and pentavalent vaccines to the children of South Asia, liberalize the regime of business and medical visas, increase intra-regional tourism, promote use of solar energy, increase cross-border physical, digital and knowledge connectivity, lshare its expertise in disaster management and mitigation etc.
- In fulfilment of the announcements made by the Prime Minister at the XVIII SAARC Summit,(i) India has contributed US$ 1.05 million for up gradation of the SAARC Tuberculosis and HIV/AIDS Centre laboratory in Kathmandu to a supranational laboratory (ii) A delegation from Afghanistan visited India in November, 2015 to participate in the polio immunization drive and learn from our best practices (iii) India organized the first ever South Asian Annual Disaster Management Exercise(SAADMEx) from 23-26th November, 2015 in New Delhi to provide participants a practical, realistic exercise aiming to address the diverse strategic issues of a multi-national disaster relief operation and coordination (iv) The regime of Indian business and medical visas have been liberalized for SAARC nationals (v) India has set up a Special Purpose Facility(SPF) to finance infrastructure projects in the region that would enhance our connectivity and trade.
- India was the first country to reach out to Nepal in the aftermath of the devastating earthquake. Our emergency assistance drew appreciation from all quarters.
- India’s emphasis is on three central themes of SAARC- trade, connectivity and people-to- people contact.
- India has hosted key meetings of SAARC Ministers of Transport, Home, Finance, Trade, Agriculture, Culture, Health, Environment, Education and Science & Technology. It has organized a number of training programmes/workshops/seminars on subjects as diverse as space technology to performance management, digital economy to tourism.
- India hosts the prestigious South Asian University. It is committed to provide 100% of its capital costs including 100 acres of land for its permanent campus in New Delhi. India provides one hundred fully paid up scholarships at the South Asian University for students from SAARC LDCs. It also provides post-graduate and doctoral studies scholarships at the Indian Forest Research Institute, Dehradun. Besides, India offers two scholarships to each Member State annually through ICCR under the SAARC Chair, Fellowship and scholarship schemes.
- The 12th South Asian Games were held from 6-16th February, 2016 in Guwahati and Shillong, under the auspices of South Asia Olympic Council. Prime Minister Narendra Modi inaugurated the Games.
- At the 18th SAARC Summit in Kathmandu, India offered to develop and launch a satellite dedicated to SAARC countries. India has called for a Regional Air Services Agreement and offered to help in creating an enabling environment to reduce telecommunications costs to improve connectivity. It is also the prime mover behind the proposed Motor Vehicles Agreement and the Railways Agreement. India is also actively engaged in implementation of the SAARC Framework Agreement for Energy Cooperation which offers a conducive environment to facilitate cross border electricity trade within the SAARC region.
- India’s trade with South Asia accounts for around 5.5% of its global trade. We have been advocating expedited negotiations/implementation of agreements, promoting investments, trade, exchanges in the region. Under SAFTA, India has unilaterally offered duty free access on all items to the SAARC LDCs and has met the Phase II commitments for non-LDCs. It has zero tariff for goods coming from LDCs. We are eliminating 455 out of 480 tariff lines in our Sensitive Lists for LDCs.
- India is ready with its schedules of commitments for early operationalisation of SAARC Agreement on Trade in Services(SATIS). Our approach is to lead in tariff reduction and eliminate sensitive lists in a calibrated, yet, progressive way.
- The fledgling SAARC Development Fund(SDF) finances sub-regional projects envisaged under its social, economic and infrastructure windows. India is the only country to have paid its assessed contribution( for the entire 5 year period) of US$ 89.9 million and a voluntary contribution of US$ 100 million.
- A currency swap arrangement for the region, with a base fund of US$ 2 billion from India provides short term foreign exchange liquidity requirements of Member States.
- The tele-education project for SAARC countries initiated by India benefits the target student community.
- India has been extending financial support to a number of cultural organizations working for regional integration in the SAARC context. SAARC Bands Festival, Literature Festival and Crafts Festivals, Folklore Festivals have become annual features. A SAARC Museum of Textiles and Handicrafts and Training Centre is being established in New Delhi
- The tele-medicine project in Afghanistan offered by India runs successfully. The regime of Indian medical visas has been liberalized for SAARC nationals.
- India understands and appreciates the concern over the challenge of climate change in the region. It has established an Endowment for Climate Change with a corpus of Rs. 25 crores to finance environment related projects. India has unilaterally undertaken several regional projects in the fields of solar rural electrification, rainwater harvesting, seed testing etc.
- India’s proactive stance since 2004 as part of its new approach to the countries in the neighborhood has been a transformative factor in ensuring the gradual and irreversible transition of the organization from its declaratory to implementation mode. India’s commitment to shoulder more than its assessed responsibilities, in an asymmetric and non-reciprocal manner, has resonated well within the region
Apart from the ambit of SAARC, India has taken several initiatives to improve bilateral relations with all the member countries without exception. India’s historic free trade arrangements with Bhutan and Nepal have been expanded to include a FTA with Sri Lanka and significant liberalisation of market access for Bangladesh’s principal exports, namely textiles. India had extended the MFN status to Pakistan way back in 1996 and waited for decades for Pakistan’s grant of Non-Discriminatory Market Access to it that is also prescribed in the very first article of WTO. India is committed to the economic development of Afghanistan and already has allocated US$ 2 billion on important infrastructure projects in the energy and highway sectors among others. Denial of transit access by Pakistan to Afghanistan has obliged India to develop the Chabahar Port facility in Iran for accessing both Afghanistan and the Central Asian Republics. India has also extended billions of dollars worth of lines of credit to her neighbours in the spirit of " Sabka Saath Sabka Vikas”.
The Pakistan Problem:
The biggest obstacle to SAARC’s functioning and growth has been the frequent stand-offs between India and Pakistan- the two largest members , which between them control 80% of its land area, over 85% of its population and over 90% of its GDP. The exception to the SAARC bonhomie and I concur with former Indian National Security adviser SS Menon, is Pakistan, not just because she is on the "cusp between West and South Asia, and suffers the ailments of both, but as a matter of conscious choice by the Pakistani establishment of the kind of state and society they are building, of their instruments, such as political Islam and jehadi tanzeems and terrorists, and of the calculated use of tension in their relationship with their immediate neighbours, India, Afghanistan and Iran”. He adds " Pakistan suffers from weak state structures, religion in politics and over politics, building nationalism on ancient or manufactured animosities, sectarian violence, an outsized military (in terms of its political role, its claim on national resources, and relative to the real security threats the country faces), a lack of popular participation and belief in the political system, weak economic prospects, and so on. At the same time Pakistan is trying to tap into the economic vitality and consolidation of East Asia, led by China. The China-Pakistan Economic Corridor, from Gwadar port through the Karakoram mountains to Xinjiang is one such an attempt”.
It is an irony that "one size fits all” Pakistan has benefited from the changing situation in Asia to make itself relevant to other states like it did during the cold war and thereafter. China seeks regional and global role for which it requires pliable partners, and Pakistan is a ready and needy one. As often claimed if US were to indeed withdraw from Afghanistan they need to close the loop with the Taliban that Pakistan helped create ab-initio and now offers to help broker the deal. In another milieu acute contest between Saudi Arabia and Iran- Shia and Sunni, and the fight against (ISIS) Daesh have given yet another handle to Pakistan. It joined the 34-member Sunni coalition led by Saudi Arabia for which former Army Chief General Sharif has been appointed to lead.
Over the years India has made repeated efforts and consistently sought to normalise relations with Pakistan in our own and regional interest. However, we have been repeatedly rewarded by the attacks on vital Indian targets by Pak based terrorist groups - a pattern that has become part of their DNA. Their intransigence in addressing the terrorism emanating with the support of the establishment from the Pakistani territory led to India not attending the Islamabad SAARC Summit and its eventual cancellation. This is indeed a setback for the regional effort as India has moved on to try and isolate Pakistan internationally on this score while developing sub regional cooperation in the context of BBIN and BIMSTEC and ASEAN which has begun to pay better dividends . In the meantime India did not prevent the appointment of Pakistani Secretary General of SAARC. In the cultural domain India also sponsored the Karachi literature festival. However India now has begun to explore the sub-regional and bilateral options with greater rigour telling Pakistan "Better with you but will go on without you.”
Extraneous CHINA in the NEIGHBOURHOOD
We share several neighbours with China. Pakistan, Nepal, Bhutan and Myanmar who have borders with China hence it is difficult to claim primacy of relationship. But India’s relationship with China is fraught with competition and cooperation. China unwillingly acknowledges that in the region India is the only country that could give it a run. Although China like any other country would like to develop relations with its neighbours and that’s normal but since they fit into a "containment perspective” as far as India is concerned the problem gets compounded. For example India’s closer relationship with US and Japan and ASEAN and supremacy in the SAARC is considered inimical to their interests by China. Same applies to India when one sees the Chinese aggressive projects like the CPEC; Belt and Road Initiative or for that matter maritime expanse in the IOR ( Indian Ocean RIM) all seem to fall into China’s " String of Pearls strategy ‘ geared to control Indian influence . This gets further accentuated given its special , strategic and all weather friendship with Pakistan which is like a surrogate and a willing partner to Chinese designs be it through the proposed $ 36 billion projects under the CPEC or excessively close military and defence cooperation or for that matter turning a blind eye to Pakistan ‘s collusion with terror outfits. All these are prima facie inimical to India’s peace dividends. Moreover although we have interacted as two matured countries China continues to occupy 4000 Sq Km of Indian territory and part of Kashmir parcelled out by Pakistan to them besides making ridiculous claims on Indian territory most recent being Arunachal Pradesh and the hue and cry made during the visit of HH Dalai Lama . If China was benign and did not have ulterior motives we would have no cause of worry. Since the relationship has several prominent adversarial knots our concerns are quite legitimate. China currently an Observer in SAARC has been aiming at the full membership through Pakistan and possibly other beneficiaries of its largess in the region. China held back India’s membership to SCO till Pakistan was admitted and now the same game is being played against India’s membership in the NSG. China is effectively using Indo-Pak rivalry to its advantage and wants to keep India embroiled in its immediate neighbourhood alone. This vicious loop needs to be broken.
To realize their Maritime Road or Silk Route ambitions and " string of pearls " objectives , China has been actively pursuing contracts for the construction of Hambantota port and the expansion of Colombo port. They are also looking to develop special economic zone of more than 15,000 acres near Hambantota and a city enclave South of the newly built Colombo container port. Chinese warships and nuclear submarines have been making port calls at Colombo since last three years. Last year in February, PLAN Type 926 submarine was docked in Colombo suggesting continuous presence of PLAN submarine(s) in the IOR that obviously irked India. On the other hand the Sri Lanka would presumably like India to develop Trincomalee port project. Keep eggs in all the or at least two baskets .
Xi’s visit to Bangladesh on October 14 last year before he came to India for BRICS Summit , was the first by a Chinese head of state since President Li toured the country in 1986. The trip was clearly aimed at countering India’s efforts to strengthen relations with Dhaka. Xi emphasised the importance of Bangladesh to China as a partner in South Asia and the Indian Ocean region. He said Beijing was ready to deepen "political mutual trust and elevate our relations and practical cooperation to a higher level.” A joint statement declared that 2017 would be the "year of friendship and exchanges.” During Xi’s visit, the two governments signed 27 agreements involving $24.45 billion in assistance and investment for Bangladesh. Moreover, 13 Chinese corporations signed joint venture agreements worth $13 billion with Bangladeshi companies.
In September 2014 President Xi Jinping visited Maldives. China welcomed Maldives to jointly build 21st Century Maritime Silk Road. Bangladesh, Sri Lanka and Maldives have supported the project, which includes Chittagong, Colombo and Hambantota ports, as well as a potential foothold in Maldives which will be a strategic challenge for India.
It is normal and easier for smaller countries to offset one big country against the other by securing the political and economic benefits from both in the short and medium term. Our neighbours also suffer from the "Big Brother Syndrome”. And to carve out their identity, as far as India’s concerned, they try to exploit the big power rivalry by eking out their respective strategic advantage to the Chinese and play the "China Card” with us. It may be difficult for India to match dollar for every Chinese Yuanned dollar for they have much deeper pockets. But India’s democratic dividend and distinct non- neo colonial advantage exercised through her economic strength and impeccable credentials should be able to neutralise such forays in our discourse with the neighbours. Perhaps an idealistic hope but could possibly plug into the realpolitik.
During his visit to India in September 2014 speaking at ICWA, President Xi articulated China’s approach stating that China views its engagement with India as part of China’s larger South Asian goals. Xi pledged that China will work with South Asian countries to increase bilateral trade to 150 billion U.S. dollars, raise its investment in South Asia to 30 billion dollars, and provide 20 billion dollars in concessional loans to the region in the next five years. Besides that, China, he said, plans to offer 10,000 scholarships, training opportunities for 5,000 youths and exchange and training programs for 5,000 youths, and train 5,000 Chinese language teachers for South Asia in the next five years. He noted that China is the biggest neighbour of South Asia and India is the largest country there, Xi said Beijing is ready to work together with New Delhi and make even greater contribution to the development of the region, "so that the three billion people living on both sides of the Himalayas will enjoy peace, friendship, stability and prosperity.” But this is better said than done since the ground reality is starkly different.
We can look at South Asia and SAARC as a half-full glass while the pessimist views it as half-empty. The realist, however, drinks the water in the glass and wisely quenches his thirst. We need not be despondent over population issues, abysmal poverty levels and endless squabbles over historic wrongs for ever .Rather we should focus on the region as immensely youth and change driven replete with vitality and a can-do approach, on-going reforms as well as its diaspora and huge market advantage so that SAARC could claim its rightful place.
While India continues to be the fastest growing major economy at over 7% the neighbouring countries should discern the benefits accruing to them from it since India follows a non-reciprocal mutually beneficial policy towards the neighbours so that the unnecessary negativity of ‘Big brother syndrome” could be perceived by smaller nations and economies in the correct context. We also believe that economically progressive neighbours are in our own interest. All sides need to make sincere efforts so that the bad politics does not drive out good economics. At the end of the day growing together is the only option since we cannot choose our neighbours that have been dictated by geography and history. Prime Minister Modi also said at the Nepal Summit that we are not only "Pass-Pass” but "Saath –Saath” assuring our neighbours that ""India has to lead and we will do our part”.