December 28, 2014

SAARC: Not on Track

Yohannan Chemarapally

THE recently concluded Kathmandu SAARC summit has not been a very good advertisement for regional unity or cohesion. The 18th SAARC summit was held in the backdrop of renewed tensions between the two most powerful members of the regional grouping, India and Pakistan. The coming to power of the BJP in India and that too with a massive majority has put India’s role in the region under renewed scrutiny. Only one important agreement, relating to energy connectivity was signed and that too at the eleventh hour. The other two important ones on road and railway connectivity will probably have to wait till the SAARC leaders meet again in Pakistan for the 2016 summit. It was decided that henceforth the summit will be held only once in two years. It will no longer be scheduled as an annual event. There were no significant new agreements on combating terrorism which had been identified as a top priority by India, Afghanistan and Nepal. “Deeper Regional Integration”, the theme of the November SAARC summit seems to be more of a pipe dream as no agreements were reached on the flow of investments. This did not deter the SAARC leaders from announcing that a regional economic formation will be a reality in the next 15 years. The Kathmandu declaration issued at the end of the summit talked of developing a “blue economy” for the region based on maritime trading between member states. Like on previous summits, the member countries pledged to cooperate in monitoring cyber crimes, cooperate in ensuring good governance and ensuring universal health security, pledging universal health coverage along with food security. All the leaders present in Kathmandu duly declared the summit as a success but the facts on the ground tell another story. DIPLOMATIC CHILL WITH PAKISTAN Before the Kathmandu summit ended, the Indian prime minister, Narendra Modi and his Pakistani counterpart, Nawaz Sharif, rather reluctantly shook hands for the waiting cameramen. The two leaders had refused to virtually acknowledge each other on the first day of the summit. It was not a secret that the Pakistani prime minster was upset with the precipitate Indian decision to call off foreign secretary level talks in August this year. Firing by both sides across the LoC in October which continued for weeks had further vitiated the atmosphere between the two countries. Immediately after becoming prime minister, Modi had said that India places the highest priority on improving relations with its South Asian neighbours. He had even committed to the setting up of a “SAARC Bank” on the lines of the “BRICS Development Bank” so that member countries could work more closely in the region. But within months after taking over, Modi’s foreign priorities seem to have changed. The diplomatic chill with Pakistan has had its repercussions on the SAARC summit. Modi held separate talks on the sidelines of the SAARC summit with all the leaders of the SAARC nations, except the prime minister of Pakistan. The Indian side blames Islamabad for placing road blocks on the connectivity related issues. Modi in his speech implicitly warned Islamabad that regional integration would happen “through SAARC or outside it” after the grouping fails to agree on connectivity pacts. Despite a free trade pact signed by SAARC countries in 2006, trade among South Asian nations accounts for only around 5 percent of their total trade. Pakistan, according to Indian officials, feels threatened by the prospects of India using its territory as a corridor to transport goods and emerging as a competitor in Afghanistan. But there is also an opinion that things could have turned out differently if the initial bonhomie exhibited by Modi towards his Pakistani counterpart would have at least extended up to the end of year. Expanding business and trade links with India had been the centre piece of Sharif’s policy till the falling out with New Delhi took place. In his speech at the SAARC summit, Sharif had offered Pakistani territory as an energy and transport corridor between South and Central Asia. Sharif told the Pakistani media his country’s dignity was paramount and that he would not succumb to military and diplomatic pressure from the Indian side. Before proceeding to Kathmandu, Sharif said that he was prepared to resume the dialogue process with India, provided New Delhi made the first move. He also reiterated that Pakistan would keep on consulting the separatist Hurriyat leaders before the beginning of a new round of talks. Another visible point of disagreement at the SAARC summit was on the inclusion of China either as a full fledged member of SAARC or as a dialogue partner. The Pakistani prime minister in his speech also called for the inclusion of South Korea as a full fledged SAARC member. At present, the two countries along with the US, EU, Iran, Myanmar and Japan only have observer status in SAARC. Only India has objected to China being included in SAARC. The Chinese government has been asking Delhi for a quid pro quo on the issue, promising India full membership of the Shanghai Cooperation Organisation (SCO) in lieu of membership of SAARC. The Indian political establishment is of the view that China given its economic muscle would diminish India’s de facto status as first among equals in the SAARC hierarchy. They have apparently calculated that in the SCO too, India would be playing second fiddle to Russia and China. From recent foreign policy initiatives, it is apparent that the BJP government would any way prefer closer strategic links with the West than with Beijing or Moscow. During his recent trip to Myanmar, Australia and Fiji, the Indian prime minister conveyed a not too subtle anti China message on issues relating to the South China Sea. He tried to position India as a counterweight to China in the East Asian and Pacific regions. The Indian prime minster was in far away Fiji in the last week of November to meet with leaders of Pacific island nations. The Chinese president, Xi Jinping was also in Fiji a few days later doing the same things. Washington has not taken kindly to the growing Chinese presence in the Pacific Ocean. The Fijian government in recent years had adopted a “Look North” policy that emphasized on stronger ties with China. But China is also not without friends in South Asia. The SAARC host, Nepal along with Pakistan and Sri Lanka were among the member countries that strongly argued for China’s entry into the SAARC grouping. China was first admitted as a SAARC observer nation in 2005 along with Japan. Since then, Beijing has greatly strengthened economic and political ties with all SAARC countries with the exception of Bhutan. The Kingdom of Bhutan tried to set up an embassy in Beijing and allow a Chinese ambassador to take up residence in its capital, Thimphu two years ago. The move was not taken kindly in Delhi and the government which initiated the move soon lost an election. The new Bhutanese government has been more careful in keeping New Delhi’s sensitivities in mind. BEIJING’S ECONOMIC PUSH Beijing has continued with its diplomatic and economic push in the region. The Chinese vice foreign minister, Liu Zhenmin who represented his country at the Kathmandu SAARC summit pledged an investment of $30 billion for infrastructure development in South Asia along with 10,000 scholarships for young South Asian students. Countries like Nepal, Sri Lanka and the Maldives have benefited immensely from Chinese aid and investment. The building in which the SAARC summit was held was built by the Chinese government. China has surpassed India as the biggest investor in Nepal. The governments in the region know that China has deeper pockets than India. China so far has invested more than $30 billion in South Asia. Another $25 billion in loans have been given at concessional rates to SAARC member countries. Besides there is a feeling in most SAARC countries that India has a penchant for interfering in their internal affairs. The Indian prime minister’s comment in Kathmandu on the slow pace of drafting a new Nepalese constitution was not taken kindly by many of the political party leaders involved in the drafting process. China scrupulously avoids doing so and is willing to do business with governments of all hues including the right wing BJP led government in India. After the SAARC summit ended, a China-Pakistan multi-billion dollar economic corridor was formally inaugurated. It will consist of a 60km four lane fenced motorway connecting the two countries. China’s economic blueprint for economic integration of the region envisages the creation of a $40 billion “new Silk Road” economic belt connecting Central and South Asia and a Maritime Silk Road that will connect Southeast Asia with South Asia. The Chinese have already built railways and ports in the region to enhance connectivity. Railroads in Tibet have reached the borders of India, Nepal, Bhutan and Bangladesh. Whether some SAARC members like it or not, China has emerged as a key player in the South Asian region. India is among the many Asian countries that have signed up to a member of the Chinese led Asia Infrastructure Investment Bank (AIIB) which many observers predict will emerge as a rival to the World Bank. The Kathmandu SAARC summit ended with a Declaration that stressed on the collective efforts in combating terrorism in all its forms. SAARC member states once again pledged to prevent human trafficking and the exploitation of children for forced labour. Given the wide support for China to be included in the grouping, the member states agreed to review and analyze a previous document regarding the engagement with observer countries in order to establish “a dialogue partnership”. The current SAARC chairman, Prime Minister Sushil Koirala of Nepal in his concluding address stated that the summit succeeded in deepening cooperation in the core areas of investment, trade finance, energy, infrastructure and connectivity.