OpinionsLike China, India must protect its interests

Like China, India must protect its interests

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Like China, India must protect its interests

Sushant Sareen

INDIA needs to not only remove all impediments and obstacles that are holding back its own economic potential but also become pro-active diplomatically to balance China by entering into agreements and alliances – both economic and strategic – with countries that share the same concerns.

China is doing what it thinks is in its best interest; it is about time that India too starts doing what is in its best interest. In what is perhaps one of the most significant diplomatic moves in recent years, India resisted all the pressure, blandishment and entreaties of the Chinese and refused to send an official delegation to the Belt and Road Forum (BRF), the carefully choreographed conference organised by China to present itself as the new pole of global geo-economics and geo-. The Chinese were of course eager to use the conference to push ahead with their ambitious One-Belt-One-Road (OBOR) scheme which seeks to establish China's economic and strategic stranglehold on large parts of the world. With the Chinese throwing billions of dollars at countries that have been either seduced or browbeaten to accept Chinese largesse (which ostensibly comes with extremely attractive terms, but in reality seeks to ensnare the recipient country), many countries have signed on the dotted line and virtually accepted China's suzerainty. India has been a notable exception and has refused to become part of China's ill-conceived, if also self-serving plan, which is nothing more than a ‘by China, of China and for China' scheme to dominate the region and the world.

The usual suspects in India – people who will reflexively oppose any and every decision of the Modi government, others who without applying their minds to the issue at hand, get swayed by the propaganda and the mood of the moment, and those who will do anything for a junket – have been expressing their apprehension that India might end up isolated by refusing to kowtow to Chinese plans, even more so when even the US, Japan, Australia and some other countries (including European countries) which despite concerns over OBOR, participated in the BRF conference. Quite aside the fact that there is no way to isolate a country of 1.25 billion people with the third largest in the world (on Purchasing Power Parity basis) which is today also the fastest growing large economy, India had very genuine reasons for giving the short shrift to OBOR.

The Ministry of External Affairs has eloquently spelled India's position on OBOR. While India supports all initiatives that seek to enhance connectivity between countries and regions, these “must be based on universally recognized international norms, good governance, rule of law, openness, transparency and equality. Connectivity initiatives must follow principles of financial responsibility to avoid projects that would create unsustainable debt burden for communities; balanced ecological and environmental protection and preservation standards; transparent assessment of project costs; and skill and transfer to help long term running and maintenance of the assets created by local communities”. The spokesman said that India had for long been “urging China to engage in a meaningful dialogue on its connectivity initiative”, so that there is some clarity on the China's grand plans. However, the Chinese had so far not deigned to clarify to India how exactly the entire scheme was going to operate. Finally, the spokesman made clear India's fundamental objection to the China-Pakistan Economic Corridor (CPEC), which according to the Chinese was a ‘flagship' project of OBOR. The fact that CPEC passes through a part of Pakistan-occupied is a flagrant violation of India's “core concerns on sovereignty and territorial integrity”, and therefore unacceptable to India.

The economics of OBOR is extremely dodgy. The track record of Chinese mega investments in places Africa, Asia and Latin America is extremely dubious. In most of these places, the Chinese build infrastructure projects, but at a very high cost to the host country. The spin-offs of these investments for the local economy simply do not justify the cost. The template that the Chinese use involves not just investing their money, but also using only their companies, labour, engineers, building material, technology, transport etc. to construct the projects. In addition, they build enclaves for Chinese workers which are more like autonomous zones where local laws don't really apply. It is an arrangement of the type that European colonists had `in the 17th Century when they would set up ‘factories' to conduct their business and trade. The loans that are farmed out on ‘concessional terms' are so big that servicing them soon becomes impossible. The Chinese then insist on their pound of flesh. This can either be in the form of cornering the natural resources of the country (oil in Venezuela) or taking over a huge parcel of land for Chinese use (Tajikistan), or taking over the constructed project on a long term lease (Hambantota in Sri Lanka) or even taking a virtual lien on the whole country (Pakistan). Most of these countries are so indebted to China that they become captive markets of China in a classical colonial pattern of economic relationship and their foreign and security policy starts being tailored to China's requirements.

While it is seductive to talk about railroads criss-crossing the Asian landmass and connecting Asia with Europe, the fundamentals of transport economics makes nonsense of the economic viability of building roads and railways as a substitute for sea routes. In a recent article in the South China Morning Post, it was calculated that sending containers from China to Europe by rail is two and half times more expensive than sending by sea. The same article also worked out that while a single container ship can carry 10000 containers of 40ft length, the same number of containers would need 294 trains! Apart from transport economics, there are issues of institutional arrangements that remain unclear. Who will use the ports and SEZs being built by Chinese, and for what purpose? Who will set up industry in these places, and to service which market? What will be the taxation policy, labour laws, legal framework, customs laws etc. in these places? There are innumerable such questions which remain unanswered by the Chinese. The Europeans have already distanced themselves from China's OBOR infrastructure initiative on grounds of lacks of transparency, questions about sustainability and lack of fairness in the tendering process, precisely the concerns that India too has been expressing on OBOR.

The strategic dimension of OBOR is also a matter of concern to India. The way China is dominating smaller countries and using their territory to expand its global footprint through military bases, especially in the Indian Ocean, is a matter of serious concern for India. In the specific case of Pakistan, there is enough evidence that the port of Gwadar will double-up as a Chinese Naval base. This will immensely complicate India's strategic environment. Add to this the fact that the CPEC is running through Gilgit-Baltistan part of Pakistan-occupied Kashmir, which could completely alter the status of the area to India's detriment. How can India ever accept such a plan which is an assault on its territorial claims and violates its core concerns?

Even more worrisome is the fact that the sort of investments that China is sinking in Pakistan, has deluded Pakistan into imagining that it is now going to emerge as the centre of international commerce and will become a gateway to China. An emboldened Pakistan which convinces itself that China has its back could indulge in military adventurism against India, something it has always done when it thought that it had the unflinching support of a major power. For India, the situation becomes worrisome because at the very minimum it means a disturbed western front, and in the worst case scenario it will mean a two front conflict. There are people who are of the view that it is better for India to be in OBOR than be out of it because India could then negotiate better terms, benefit from some projects and also engage the Chinese to address our concerns. But for the last three years, this is precisely what India has been doing, with very little give from the Chinese to address our concerns. The stand that the Chinese have taken is ‘our way or the highway', which clearly India couldn't accept.

Under these circumstances, it is sensible for India to adopt the policy of ‘splendid isolation' from China's grand plans. Of course, this doesn't mean doing nothing. Quite to the contrary, India needs to not only remove all impediments and obstacles that are holding back its own economic potential but also become pro-active diplomatically to balance China by entering into agreements and alliances – both economic and strategic – with countries that share the same concerns. China is doing what it thinks is in its best interest; it is about time that India too starts doing what is in its best interest. By not joining OBOR, India has taken the first step in this direction. What is needed now is to take the many other steps that are required to protect India and its interests. More than OBOR, this is the real challenge before the Indian government, state and society.

The author is a Senior Fellow, Vivekananda International Foundation. Views expressed are personal.

Northlines
Northlines
The Northlines is an independent source on the Web for news, facts and figures relating to Jammu, Kashmir and Ladakh and its neighbourhood.

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