Tag Archives: Chabahar

Politics of Spite

09 Wednesday May 2018

Posted by in Iran, Middle East

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As predicted, US president Donald Trump has led the United States out of the Joint Comprehensive Plan of Action (JCPOA) with Iran. The agreement, which was supposed to increase international (Western) oversight into Tehran’s nuclear programme and hopefully rein in its nuclear ambitions, was one of the few unambiguously positive legacies of Trump’s predecessor, Barack Obama, but ran into opposition even during the delicate negotiations. Critics tried to add riders involving their pet projects – usually human rights or missile development – to the deal in an attempt to derail process. Consistent with his pre-election criticism for once, Trump had called the JCPOA a bad deal and promised to repudiate it if elected.

America’s European partners – Britain, France, Germany, and Russia – have parted ways with Washington and declared their intent to continue adherence to the JCPOA; China has so far been mute but already threatened with a trade war with the United States, it is highly likely that it, too, will follow the Europeans in holding on to the Iranian nuclear deal.

It is not yet clear what the fallout of the American departure from the JCPOA will be. Although the rhetoric of the exit has been focused on how the agreement did not go far enough in preventing Iran from pursuing nuclear weapons, the fact that Trump administration officials have stated that sanctions will be “snapped back” indicates that they believe Iran to be in breach of its obligations under the JCPOA – although most technical experts disagree with this evaluation.

Given that the other members of the E3 + 3 – particularly Britain, France, and Germany – will not be following the US example, the interesting question is if Washington intends to sanction their businesses and banks under the recently passed Countering America’s Adversaries Through Sanctions Act (CAATSA) as India fears its defence dealings with Russia might. This would cause an enormous rupture in in the US and world economy as China is the United States’ single largest trading partner and Britain, France, and Germany are together the fourth largest ahead of Japan. Yet if Trump does use his presidential discretion to waive sanctions and exempt these four countries, it would be too blatant an act of political hypocrisy if the same treatment was not extended to others over Russia and North Korea as well as over Iran.

In February 2018, Patrick Pouyanné, the CEO of the French oil & gas giant Total, openly called for the implementation of the 1996 European Union Blocking Regulation, a law that prohibited European firms from cooperating with foreign demands that are in violation of international law or hurt European sovereign interests. Denis Chaibi, a senior diplomat in the European External Action Service, commented that the EU was looking at a variety of options and the blocking regulations would not be difficult to implement.

Ultimately, these are political instruments and businesses would be hurt either by European penalties for obeying US sanctions or the denial of access to American markets due to US sanctions. Obviously, firms would prefer having access to the far larger American markets than pin their hopes on soaring Euro-Iranian trade and the threat of blocking regulations is empty. States are supposed to exercise restrain and caution and a tit-for-tat exchange between the United States and its three primary European allies will hurt everyone. More to the point, the multinational supply chains of most large industrial houses today means that there would be few European firms that are not exposed to the United States and are free to do business with Iran.

Internationally, many countries would be pulled into the US wake for similar reasons; most countries are fairly integrated into the US economy and their national economies are not robust enough to withstand the loss of the American market. Additionally, others may have political reasons to reluctantly support Washington. India, for example, has been trying to purchase high-end American weapons systems and seeks Washington’s cooperation on several crucial issues such as defence technology and the geopolitics of the Indo-Pacific. It is most likely that India will have to bear the damage done to its own ambitions in Chabahar and the International North-South Trade Corridor (INSTC). Delhi will have even more to lose if Tehran responds to Delhi’s distancing by handing the responsibility for the Shahid Beheshti port over to Beijing.

If India can persuade the United States for a partial waiver on trade as it had done last time, its importance to Tehran would rise again only to the extent that other countries stop or reduce links with the Islamic republic.

Saudi Arabia, considered to be one of the beneficiaries of the American abnegation of the JCPOA, will enjoy in the short-term the spike in oil prices that is bound to follow Trump’s decision. However, this entire episode will have reiterated to Iran that the only way to be truly safe from American interference, as an Indian general is supposed to have observed after the First Gulf War in 1991, is to acquire nuclear weapons. Tehran seems to have been acutely aware of this note – Iran’s ambitions, as revealed by Benjamin Netanyahu’s recent document dump, were to posses just five nuclear warheads than an entire arsenal.

Riyadh has only managed to stoke Tehran’s determination and not douse it. The JCPOA was designed to give the international community breathing space to consider how best to dampen Iran’s love of the Bomb – it was never meant to provide a permanent solution as there are none. As non-proliferation experience has illustrated, the determined country will acquire nuclear weapons regardless of the financial and political costs to it and the willingness to pay such a high price will attract unscrupulous suppliers. The classic example of this is Pakistan, whose nuclear journey would have taken far longer had it not been for the generous acts of commission by China and of omission by the United States.

Perhaps the greatest beneficiary of the American walkout is Israel. On the one hand, the reintroduction and expansion of sanctions hurts the Iranian economy and removes funds that might have otherwise gone to fund the Hezbollah and its adventures in Syria but on the other, the European and Iranian decision to continue observing the JCPOA keeps the checks on the Iranian nuclear programme in place for at least the next decade. If the archives reveal 30 years down the line that this was a game of good-cop-bad-cop, this would be a strategic masterstroke by Benjamin Netanyahu.

The one certainty at this moment is that Iran is not as isolated as it was prior to 2015. Even if Europe falls in line with America’s wishes, Russia and China are both unlikely to go along with the West this time. Both countries have been antagonised by Trump’s sanctions and threats of a trade war to be receptive to cooperation. This opens the door for greater Russian and Chinese influence in the Middle East. Russia also gains by the rift that has been created between Europe and the United States over the Iranian nuclear programme.

In some ways, Trump has just given Iran’s hardline clerics a lease of life. There have been several signs that Iranians citizens are frustrated with their government and the poor economy. Some analysts were even hopeful of organic reforms that would gradually move the country from its extreme Islamic views. Trump’s abandonment of the JCPOA underscores everything hardliners warned against – that the United States is not a trustworthy partner and it ultimately seeks the total subjugation of Iran.

If Washington expects Tehran to come back to the negotiating table, it may have a long wait. Rather than re-engage with a party that has shown bad faith, Iranian president Hassan Rouhani may simply choose to wait out his American counterpart in the hopes that Trump’s successor would be more amenable to the Obamian status quo.

It is not clear what the Trump administration sought to achieve by leaving the JCPOA. If anything, it draws attention to the Iranian bogey in American minds and the ghosts of 1979 that such policies would have any support in the houses of legislature or with the citizens. Pace the political acrobatics that are about to ensue over the coming days, the ultimate prize is the withering of the Iranian nuclear weapons programme. It is not clear if anyone in the White House had kept that in mind while thinking about abruptly walking out of an international treaty.

This post appeared on FirstPost on May 10, 2018.

Earning the Dragon’s Respect

16 Friday Mar 2018

Posted by in India, Opinion and Response, South Asia

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Pace protestations from Delhi to the contrary, India’s relations with its larger northeastern neighbour China have at best been fraught with tension that have boiled over to outright hostility at the worst of times. Given Beijing’s consistent efforts to undermine Indian security and standing on the world stage, it is beguiling to see a not inconsiderate number of Indians expressing the hope that the 21st century will belong to a partnership between the two countries that will reshape the international order to the benefit of rising powers; with greater contacts through education, tourism, and trade, the border issue would diminish in salience.

Such aspirations are unrequited from the other side: it is a striking difference that Chinese businessmen returning from India are rarely as optimistic as their Western counterparts. Whereas CEOs from the United States, Britain, Germany, and elsewhere are enthused about India’s growing middle class, the improving regulatory environment, and the massive opportunities it offers in infrastructure, services, defence, and other sectors, the Chinese corporate class is more likely to complain about regulatory red tape, poor quality of human resources as well as material, woefully lacking infrastructure, and the culture of middlemen and rampant corruption. This difference indicates more than just the other side of the coin – it reaffirms that the Chinese do not see India as belonging, with themselves, to the first circle among nations.

The fundamental, unrecognised road block to India’s improved relations with China is that Beijing does not see Delhi as an equal. Incomprehensible to South Block’s mandarins confident in their own greatness, India remains for China a lesser power that could yet derail their aspirations for a Pax Sinica. Beijing, therefore, has never considered India in its own respect but as an appendix to its policies with other states.
A defining element of India’s self-projection on the world stage is the belief that somehow, it is an important nation. This could be seen in its first prime minister’s gratuitous commentary on international events at a time when India did not have the means to play a practical role in global affairs. In an audacious attempt, Jawaharlal Nehru tried to lead most of the world’s nations away from the superpower rivalry in a non-aligned third bloc. Delhi’s confidence did not come from its abilities but from a deep-rooted hubris that India simply was great; by virtue of its ancient civilisation, rich in philosophy, literature, science, architecture, and engineering, India deserved respect today.

Perhaps motivated by curiosity more than anything else, the world did accord India some attention in the early years of the newly-independent republic. With the passing of Nehru, however, so too did those giddy days. A planned economy that stumbled at every step, the constant moralising, and little contribution to alleviating the problems of the word soon put India back in the ranks of the “fly over” nations. Going by historic trends, India’s geographic size, population, and strategic location would have normally destined the country for an important global role but India’s leadership believe(d) that this was already so.

It is easy to bask in the praise of allies as India has done in recent years with the United States, and to a lesser extent, France, Israel, and Japan. However, much to Delhi’s discomfiture, it has not received the same deference from its unacknowledged rival, China. In fact, Beijing has studiously avoided reference to India in its policies except as a curt, off-handed afterthought. This disregard is apparent in the way Chinese policies are always presented as having their focus elsewhere but whose objectives may coincidentally impinge on Indian interests. For example, Beijing’s increasingly heavy footprint in Tibet has been portrayed as the integration of the forcibly annexed state into the mainstream of Chinese national life; however, the infrastructure, demographic transfers, and military deployments coincidentally put pressure on the Line of Actual Control with India. Similarly, China’s sudden activity on nuclear non-proliferation is couched in the language of creating a non-discriminatory regime though its real aim to stymie India’s admission into the Nuclear Suppliers Group is transparent.

After the Pokhran nuclear tests of 1998, China was initially silent but later released a restrained statement expressing shock and urging India to disarm and sign the Non-Proliferation Treaty and Comprehensive Test Ban Treaty. China’s official position on India’s nuclear ambitions is that it is unfortunate, wasteful, and that Delhi and Islamabad should sort out their differences peacefully; the China threat is a rumour of ulterior motives. Similarly, India’s missile tests have not merited a comment until the recent Agni V finally rattled China into seeking a hearing in the United Nations. Even then, Beijing’s greatest concern is Delhi’s cosying relationship with Washington – and perhaps Tokyo – more than anything it has been able to achieve itself. There is no acknowledgement of any consideration of India in China’s defence planning, perhaps studiously so. This has successfully de-linked the two Asian giants in most minds, though the yawning gap between the two states in terms of the size of the national economy, their militaries, and infrastructural development has also contributed in some measure.

It is natural  that a rising power like China has expansive interests. Yet Beijing’s quest for influence has always tried to block Delhi’s gains – such as the recent interest in Chabahar –  or undermine India – Pakistan is the most glaring example. Competition between powers is natural, and no one can deny China’s legitimate interests around Asia. Yet it is the tone in which they are pursued that ought to have clued Delhi in on its neighbour’s thinking.

Delhi may believe China’s indifference to be merely a psychological game but all indications suggest it is much more than that: Beijing does not see Delhi as its equal. This is why the response to overtures towards resolving the border dispute have been met with flippancy. In October 2013, as well as during Xi Jinping’s visit to India (September 2014) and Narendra Modi’s stop in Beijing (May 2015), the Chinese army intruded deep into Indian territory and remained for days.

Although the Line of Actual Control separating India and Tibet is quiet in comparison to the Line of Control between India and Pakistan, there has nonetheless been constant friction. There have been three serious incursions in as many years during which the Chinese army camped inside India for weeks before finally retreating back to their side of the line.

There is also the matter of continued support for Pakistan – not just in terms of conventional military supplies, nuclear weapons, and missile technology but also in the form of substantial economic investments that could fundamentally alter Pakistan’s economic geography as well as support for Islamabad’s terrorist forces in the United Nations. This is not out of any shared worldview or camaraderie but is purely utilitarian – Beijing’s belief is that a lesser power like India can easily be distracted from global geopolitics by significant irritation from an even smaller state such as Pakistan.

The growing disparity in economic and military werewithal between India and China lends some credence to the latter’s attitude towards the former. More importantly, Indian leaders and society remain too focused on their domestic bickering to present a strong and unwavering image to the rest of the world. If Delhi truly wishes to improve relations with the dragon, it must do so from a position of equality. This means a far narrower difference in power and a demonstrated ability to achieve strategic goals – be they defence manufacturing or aid projects in the neighbourhood – in a timely manner. India must earn the respect of its opponent before anything fruitful may be expected of border talks and other summits.

Potential Hurdles in Indo-Israeli Relations

03 Monday Jul 2017

Posted by in India, Israel, Middle East, South Asia

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Everyone is gaga over Prime Minister Narendra Modi’s trip to Israel, and they should be. Israel’s welcome to the Indian prime minister stops one step short of a Roman triumph thrown in honour of a conquering emperor. For his part, Modi has shown equal respect to his counterpart, Israeli prime minister Benjamin Netanyahu, by avoiding the ritual visit to Palestinian Ramallah and playing up the construction of a special relationship between the two countries rather than a transactional defence bonanza. Netanyahu has cleared his schedule to accompany Modi for the duration of the state visit and both prime ministers are known to have warm feelings towards each other.

Much ink has already been spilled on the natural synergy between the two countries in terms of security and the economy; though a genuinely blossoming relationship will take time to mature, there seems to be little doubt that it will. However, it is only prudent that one casts an eye on two shadows that have the potential to cloud the bonhomie between Delhi and Jerusalem. India’s relations with Iran and Israel’s relations with China stand to possibly be grounds for recriminations later on.

Although China extended recognition to the Jewish state barely five days earlier than India, its relationship with Jerusalem is far stronger in terms of simple numbers. Like India, the two sides have maintained covert contacts for defence purposes since at least 1979. Today, trade between Israel and China stands at over $11 billion – almost three times that between Israel and India. Chinese firms have invested substantially in the Israeli economy, acquiring a controlling stake in several companies and donating to Israeli universities and research labs to establish technological academic institutes. Over a thousand Israeli firms operate in China and an innovation park has been set up in Changzhou. Overall, China is Israel’s third-largest trade partner after the United States and Europe, and the largest in Asia. Militarily, Israel is China’s second-largest supplier of arms after Russia.

Like many countries worldwide, Israel has found it difficult to keep away from the renminbi gravy train. Although the personal chemistry might have been missing, Netanyahu has been quite ebullient in his meetings with his Chinese counterpart, Xi Jinping, marketing Israel as the perfect junior partner for China and hoping to marry Israel’s technology to China’s capacity. As one newspaper termed it, make in Israel, expand in China.

Any money, especially Chinese money, comes with political strings attached as Sri Lanka and Cambodia have already realised and Australia seems to be waking up to the same reality. Beijing’s deep forex pockets are difficult to compete with, even for advanced economies, let alone India. Delhi’s concern would be two-fold: where might such lucrative ties lead in terms of outside influence on Jerusalem, and what might be the impact of China having access to many of the same technologies India acquires from Israel?

For the moment, US pressure on Israel has prevented the sale of sensitive technologies such as the Phalcon airborne early warning and control system to China. However, as Chinese firms invest in Israeli technology and enter into joint ventures, Washington’s influence over Jerusalem would wane and Delhi might find itself in a very uncomfortable position vis-a-vis Israel and China.

Similarly, Israel has concerns about India’s ties with Iran. Going by rhetoric alone – there has been precious little action between Delhi and Tehran – India hopes to invest in Iranian hydrocarbons, build Chabahar, and encourage Iran to become part of its International North South Trade Corridor, which would bypass Pakistan and give India access to the heart of Asia for valuable energy and mineral resources. Thankfully for Jerusalem, Delhi has moved at its famed glacial pace and trade between the two countries stands at approximately $16 billion (per capita, that is less than half of that between India and Israel) despite the latter’s energy addiction.

While India has no defence ties to Iran to speak of – the situation in Afghanistan has evolved to the detriment of the synergy of the 1990s between Tehran and Delhi – Jerusalem might worry that increased trade between one of the fastest growing economies in the world and its present archenemy might give the latter greater economic muscle to create more problems on Israel’s doorstep.

Of course, there are many variables at play here still – Israel may offer India gas from its Tamar and Leviathan gas fields to offset Iranian gas, Tehran may prefer Bejing’s reliability and largesse in a partner than Delhi, or Israel may get frustrated with China’s notoriety in reverse engineering. The strongest counter to these concerns is to make a strong, unequivocal commitment, something that would indicate to the other side that the relationship means more than just dollars and sense. For India’s part, a proposal for nuclear cooperation may well be that indication, and Delhi may ask for something equally substantial from Israel in return. Yet the concerns remain for both Israel and India. Among friends, these are conversations best had as soon as possible. Of course, it is also impolite to discuss others one may be seeing on a first date.