Wednesday, November 26, 2014

China surges ahead while India and Pakistan bicker


NEW DELHI — For a senior Afghan diplomat sitting in India’s capital, it is easy to explain how a region with a quarter of the world’s people can account for only 5 per cent of global trade.

“India and Pakistan need to overcome their problems,” Mr M Ashraf Haidari, deputy chief of mission at Afghanistan’s embassy in New Delhi, said in an interview ahead of this week’s meeting of the South Asian Association for Regional Cooperation, or SAARC.

“Summits happen, leaders come, there’s all this consensus and declarations announced. But unfortunately, it doesn’t happen in reality.”

As leaders of eight SAARC countries meet in Nepal this week for the first time since 2011, Indian Prime Minister Narendra Modi has more reasons than ever to turn the bloc into a regional force to counter China’s growing influence in South Asia. Doing so will require him to overcome differences with Pakistani leader Nawaz Sharif.

So far, things are not looking good. Mr Modi’s government scrapped talks with Pakistan in August, which was followed by the worst border fighting between the countries in a decade. At the same time, China has promised SAARC nations part of a US$40 billion (S$52 billion) Silk Road fund to finance infrastructure investments.

“SAARC won’t be able to counter China’s influence,” said Dr Nishan de Mel, executive director and head of research at Colombo-based Verite Research, a policy research group.

“China tends to have an approach that isn’t too demanding and isn’t politically difficult for the partner country, and where the partner country will tend to see benefits quite quickly. India’s approach tends to be more hard-nosed.”

Chinese President Xi Jinping toured South Asia earlier this year to promote the Silk Road initiative. He became the first Chinese head of state to visit the Maldives and also stopped in Sri Lanka, where China is financing a US$1.4 billion Colombo Port City and sending submarines to dock.

Mr Xi called Afghan leader Mohammad Ashraf Ghani an “old friend” in welcoming him to Beijing last month, then visited Mr Sharif a week later. The Chinese President also met Bangladesh President Abdul Hamid this month to discuss economic cooperation on the sidelines of the Asia-Pacific Economic Cooperation meetings.

As of now, Mr Modi has no plans to meet Mr Sharif at this week’s SAARC meetings. The Pakistani leader last week urged India to resume talks over the disputed region of Kashmir, the subject of three wars between the neighbours.

“Kashmir remains the core contention between both countries,” Mr Sharif said in comments to an audience of leaders in Muzaffarabad, the capital of Pakistan-administered Kashmir on Nov 20. “The international community needs to convince India to return to the table.”

Mr Modi will consider how a meeting with Mr Sharif will affect his party’s chances in the Jammu and Kashmir state elections, said Dr Nikita Sud, an associate professor of development studies at the University of Oxford. Voting began yesterday, with all ballots to be counted on Dec 23.

Talks “will depend to a large extent on how such a dialogue will be perceived by their core constituencies back home”, Dr Sud said.


Commerce between SAARC nations accounts for only 5 per cent of total trade, compared with 25 per cent in the 10-member Association of Southeast Asian Nations, World Bank figures showed.

Lack of trade ties within the region is limiting total commerce: India’s exports to its 15 biggest trading partners last year amounted to US$188 billion (S$245 billion), eight times less than that of China. It also fails to match Malaysia and Singapore’s overseas sales.

SAARC nations will seek to ratify agreements for free movement of cargo and passenger vehicles, as well as railways, across member countries. Cooperation in the power sector is also on the agenda, said a statement on the website of India’s Press Information Bureau, which did not provide details.

“Development of close relations with our neighbours is a key priority for my government,” Mr Modi said in a statement yesterday before leaving for Kathmandu. “We hope that the summit will lead to concrete outcomes, particularly in regard to various initiatives on enhancing connectivity that have been under discussion for a long time.”

The Indian Prime Minister attempted to reinvigorate the SAARC grouping immediately after his election in May by inviting Mr Sharif and other regional leaders for his inauguration. The goodwill ended a few months later after India called off Foreign Secretary-level talks with Pakistan and border skirmishes between the nuclear-armed rivals last month.

“Modi is quite focused on shoring up relations with neighbours to balance China’s attempts at expanding its influence in South Asia,” said Mr Richard Rossow, an analyst at the Center for Strategic and International Studies based in Washington.

While it would be best for India and China to collaboratively develop the region, now their actions are “being played out like a zero-sum game”, he said.


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