Tuesday, January 24, 2006


Even as the US and the Europeans scramble to put in place a united front vis-a-vis Iran, it’s clear that Iran intends to go all out with its nuclear program. It has not only assumed a belligerent posture over its nuclear program but has also upped the ante on the issue of Israel. The mullahs in Iran seem to be moving to a point of no return with some observers even speculating whether we are witnessing the origins of the next World War. While such sentiments might yet be in a minority, what is undoubtedly clear is that the Iranian regime has decided to test how far they can push the West.
In a way, the West should have been prepared for this showdown. All signs indicated that it was coming one way or another. And yet the US and the Europeans seem to be struggling to come up with a coherent response.
Strategically, it makes sense for Iran to acquire nuclear weapons. In a world where states have to fend for their own security, there is no better deterrent than a nuclear weapon. Nuclear weapons may not be popular with the public opinion in the West but all major states that have nuclear weapons know their importance and therefore, have no intention of giving them up. Which states can be more secure than Britain and France today and yet there are no indications that these states want to renounce their nuclear arsenal.Compared to these states, Iran is highly insecure, located as it is in a highly volatile region. Its neighbours, India, Pakistan, and most importantly, Israel have long had nuclear weapons and do not seem to have done too badly for themselves. Moreover, after September 11, 2001 Iran has to contend with the presence of its biggest adversary in its very neighbourhood, with the US straddling Iran from both sides in Iraq and Afghanistan. It is also possible that the one lesson Iran may have learnt from the US invasion of Iraq is that the only way to prevent the US from invading is to acquire nuclear weapons as soon as possible. (Poor Saddam, if he really had nuclear weapons, the US wouldn’t have dared!).
This strategic drive got further strengthened in Iran with the complete collapse of the reformist political parties in the last elections and the election of a hard-liner, Mahmoud Ahmadinejad, as the President with little or no experience in global politics. He has decided that the only way he can continue to sideline his opponents such as Hashemi Rafsanjani is by adopting an extreme posture vis-à-vis Israel and the Great Satan. And much as the liberals in the West would like to believe otherwise, both these causes are very popular among the Iranian masses. Also, this helps Ahmadinejad to divert attention from a failing economy and soaring rates of unemployment.
So, after calling the Nazis' World War II slaughter of European Jews a "myth" and proclaiming that Israel should be “wiped off the map” or moved to Germany or the US, a conference of holocaust deniers is reportedly being convened by Iran. At the same time, the nuclear program is being used to challenge the US. This seems like a perfect time to take on the US as the Americans seem bogged down in Iraq with the US public having no more stomach for other military adventures. Iran also realizes that it enjoys great leverage in the political and security environment in Iraq and can further intensify its sabotage activities in Iraq if need be.
The global situation is also working in Iran’s favour. The credibility of the US is at an all time low in the comity of nations after the Iraq fiasco. Few states will be willing to place their bets on American pronouncements (or for that matter British) even if they are accompanied by evidence. Russia and China, two states with real leverage vis-à-vis Iran are unlikely to support meaningful sanctions for the fear of hurting their own interests. And so they are continuing to resist American and European efforts to the put the Iranian affair before the United Nations Security Council.
What is surprising is that it took so long for the Europeans to recognize this ploy. For long, all roads have been leading to the Bomb in Tehran and it won’t be long before the mullahs in Iran start brandishing it in the face of the West. And India seems to have got caught in the middle. India has come under pressure as the nature of its decision at the meeting of the IAEA Board of Governors could impact its own nuclear negotiations with the US. It remains to be seen if the Indian government decides to repeat its past voting pattern in the IAEA or succumbs to domestic pressure emanating from its coalition partners. If India votes not to report Iran to the Security Council next month, India's own credibility as a stalwart of non-proliferation would be imperilled and the future of the Indo-US nuclear deal would be in serious jeopardy.

Saturday, January 21, 2006

Images from the "Rise of China Roundtable" (Report below)

Bharat Karnad, K. Raghunath and Raja Menon

J. N. Mukhi (left), Ashok Kapur, S.J.S. Chhatwal and S. Kondapalli (center)

Ashok Kapur, S.J.S. Chhatwal and S. Kondapalli

Participants during S. Kondapalli's presentation

Jagat Mehta and Madhuri Sondhi (right)

Participants at closing

Wednesday, January 18, 2006

Report on MLSIAPA Roundtable on Rise of China

The ML Sondhi Institute for Asia-Pacific Affairs held a day-long Roundtable on November 12th 2005 on “The Rise of China and its Implications for the Rest of Asia.” We reproduce here the main points made by the chief presenters, Vice-Admiral Raja Menon (retd), Bharat Karnad, Research Professor at the Centre for Policy Research, Professor Ashok Kapur, Waterloo University, Canada and Dr. Srikanth Kondapalli of the Indian Defence Studies Association. The chairs were Shri K. Raghunath, former Foreign Secretary and Shri SJS Chhatwal, former Ambassador.

ADMIRAL K RAJA MENON began by raising two significant questions: first, Can China rise peacefully? and second, Is China rising peacefully?

He proceeded with the argument that from the time of the Romans, Mongols, Ottomans to Napoleon, history has shown that nations do not rise peacefully. Financial centres such as Venice and Amsterdam have been among the few exceptions. But for some reason, not a single nation has risen peacefully towards the upper end of hierarchy. Thus the statistics of history record much bloodshed.

The latest nation to reach the top is the USA, and her ascent is also exceptional in that thanks to the broken economy of Great Britain, her rise did not require direct military intervention. Even so, a certain amount of violence occurred. The post-war rise of Japan and Germany has also been exceptional. After Japan’s defeat, the new Constitution made professional militarism impossible. In Germany although no such constitutional restriction exists, the occupying powers created social conditions that operate against militarism. Besides, the division of Germany and West Germany’s membership in NATO ensured that her growth was not perceived as a threat by the rest of Europe. As a result, though Germany built submarines in the 1980s, none of them were of more than 1000 tons. Thus a kind of unwritten law forbids militarism. If such exceptional conditions exist in China’s case then the peaceful rise argument can be accepted.

Moreover certain nations have reservations about China’s peaceful future, the US for example. South East Asian countries like Malaysia, Philippines, Thailand and Indonesia are not in a position to do anything about the rise of China, peaceful or not, therefore it is the second-tier Asian nations like India, Japan or Vietnam which need to position themselves vis-à-vis China’s growing strength. Even for a country like Japan the ‘peaceful’ rise argument is not credible; and with no professional army and widespread hatred for militarism she has nevertheless started to prepare for the challenge from China’s rise.

With regard to India China has adamantly followed a policy of militarization of Pakistan. CIA reports were to inform Indians about Chinese missile transfers to Pakistan even while the Indian delegates were visiting China. When confronted with the issue, Chinese foreign office delegates dismissed it as something from the past. But as recently as 2004 Pakistan tested its own version of the Chinese world class missile M-9. The Chinese exhibit a tenacious determination to hold down India for at least another twenty-five years.

Admiral Menon advocated clinical analysis of the reasons and purpose behind this Chinese strategy. He pointed out that till the late 1970s, China’s economy was similar to India’s but afterwards China surged ahead. India needs to think about the geopolitical reasons and timings of such policy decisions.

The opacity of the Chinese decision making process also increases suspicions about its foreign policy. The Chinese Foreign Office is definitely not in the inner loop of decision-making in China. The text of Chinese foreign policy does not coincide either with the western school of thought or with the realist philosophy of Morgenthau. Neither of these advocates the conduct of foreign policy on two parallel tracks of economics and geopolitics. Even Clausewitz’s formula of ‘war as foreign policy by other means’ does not seem to be followed by China. But China does use military action to influence diplomatic negotiations.

China is rising as a super power without providing internal freedom to her citizens. In such a situation, with the absence of domestic opposition, irresponsible behaviour on the part of China remains a possibility, unlike in the case of the present superpower, the USA.

With regard to India and China Admiral Menon dismissed any possibility of old civilizational links playing a major role between the two. Despite the presence of Indian influences in Chinese culture, they are loath to acknowledge it.

Against the argument that unless her society becomes dynamic, China will find it difficult to become a superpower, he commented that even a closed society like the erstwhile USSR produced islands of excellence. China may not become a number one power but it can still emerge as a close number two. So India should not underestimate the rise of China.


Mr. Karnad observed that while India follows a Kautilyan foreign policy with her small neighbours, she adopts a linear path with bigger powers. China on the other hand follows a non-linear way of conducting foreign policy with regard to powers bigger than her.

Foreign diplomats in Beijing are mesmerized by the absence of any policy debate in the Chinese media. Moreover, due to the lack of expert Sinologists, India relies on secondary sources for information leading to secondary conclusions about China. Therefore India does not understand China very well, while the Chinese follow a comprehensive strategy of national security and get to know their enemy well.

There is a lack of coordination among the various Indian ministries. The defence ministry relies on the Foreign Office for information while China has an integrated structure and implements her strategies in a methodical fashion.

Mr. Karnad also focused on the changing economics and geopolitics of the Asian region. Quoting from the economic growth forecasts of the BRIC Report, he said that China is headed to become the number one economy in the world while India would be at number three.

Drawing attention to the Chinese nuclear, ICBM and submarine build-up in the region, Mr. Karnad said the situation harks back to Mackinder’s heartland and rim-land notions. China is determined to assert its dominance as the heartland region of Asia while the role of the Pacific islands is only that of a periphery region. India has emerged as the classic balancer but lacks significant matching assets.

In the new genre of politics, nations will be driven by national interest. Therefore a wrong diagnosis of the situation by India would lead to erroneous responses. India should stop behaving like a carom piece flicked about on a board and develop rather, a strategic sense of itself. He emphasized the importance of coming out of the fallacy of the ‘economy first’ attitude and pointed out that India’s accelerating economic growth should be integrated with military expansion which would truly increase her leverage vis-à-vis her friends and adversaries.

He also noted that it is not the lack of resources but wastage which is holding back India. Out of a $13-14 billion defence budget a disproportionately large amount is consumed by the Pakistan factor. Therefore real strategic growth is very weak. India needs an efficient use of available resources to acquire thermo-nuclear power. He suggested a shift from a Pakistan-centric to a China-centric military policy.

To counter the Chinese policy of militarization of Pakistan he supported the use of Tibet card and helping Vietnam to grow as a counter threat to China. He pointed out that in comparison to 1987, our military position vis-à-vis China has actually deteriorated. The Chinese PLA has kept India in the list of possible threats and they are investing heavily in the infrastructure build-up in Tibet. They are also determined to exert their dominance in the Asian heartland through nuclear, missile and submarine build-up. Although China talks about a common interest community its geopolitical architecture indicates otherwise.

He deplored the Indian government’s slowness in understanding the fact that China cannot rise peacefully. A military counter-poise to China is needed in the same way as China has created a proto-adversary for India in the form of Pakistan. To counter this India should build up Vietnam.

The Chinese are admirable for their straight thinking and unsentimental approach in following their national interest: India should do likewise. Our intellectualism and democratic traditions should not come in the way of our national interests.


In the context of the aims and efforts of the M L Sondhi Institute, Professor Kapur pointed to the need for good institutions to support good negotiation capability.

He appreciated India’s capacity and potential reflected by its participation in the global economy and focused his presentation on ‘What is the China Question?’ He reviewed the various perspectives held on China by Asians abroad and the Western community. For Asians the issue of a peaceful or aggressive China does not hold much relevance. They are influenced by their own military and geopolitical experience with China.

On the other hand the Chinese perceive threats in the post cold war era without a Soviet Union, especially from Taiwan and Japan. Japanese nationalism has become more assertive and military development is under way, linked to China’s notion that the world had become unmanageable. China cannot be expected to follow a policy of peace in isolation within the current international setting. Chinese strategic interests include her relations with the US and the extension of her influence especially in Myanmar and Siberia.

China’s deep strategic interest in South Asia had also been recognized by the USA during the Cold-War days. Pakistan not only helped the Chinese against India but also gave them entry into the Middle-East. When India followed a policy of isolating Myanmar the Chinese utilized it to gain strategic strength in what they hate to call the Indian Ocean. They also have a role in North-East India and Bangladesh. They have a heavy military build-up in Tibet. In fact the Chinese want to emerge as a force to reckon with in the region with India limited to sub-regional power status. The Indian Government has been slow to realize their strategic strength. In the 1990s India’s nuclear test strengthened India’s strategic position and presently China is the only major country which wants India’s denuclearization.

In the Pacific Region the Chinese prefer to keep the American presence as it keeps both Taiwan and Japan in check. However in the post 9/11 world the USA’s policy towards the Pakistan-Chinese alignment has changed but the Chinese have been slow to understand this.

In such a situation, and with regard to China’s internal uncertainties, India should not abandon the Tibet card. It should also monitor Nepal’s situation carefully because in the post-1949 period, the Chinese have used the word ‘peace’ either ambiguously or deceptively. The Chinese believe that with deception they can defeat even the USA so it is not an improbable strategy for dealing with India also.

At the same time an important pattern of Chinese behaviour was reflected in the 1971 war when despite the use of strong language the Chinese hesitated to open a second front against India. The reason given for this was her preoccupation with the Cultural Revolution, but generally the Chinese prefer to put the onus of initiating such action on others. They would rather provide small arms in the North-east than open a second front.

So the answer lies in pro-actively creating a situation rather than only reacting as India did in the case of Pakistan and Myanmar. China should be viewed as a strategic partner, with interests of a Confucian nature and cultural diplomacy veiling a Machiavellian reality.

Answering questions Prof. Kapur elaborated that since India has given up the Tibet card it is now difficult to revive it. Moreover it is also weak internationally as international interest in Tibet is limited. Therefore it does not give any kind of leverage in negotiations. Moreover the Chinese are buying time keeping in mind the growing age of the Dalai Lama. However with regard to China-Nepal relations Tibet still remains a factor. But much would depend up on how the card is played.

On the question of internal democracy and China’s world view, Prof. Kapur said that her world view would depend on what others were doing to China and not on the internal politics of the country. He felt that China is not interested in the resolution of the Korean problem as it would increase the US influence in the region.


Mr. Kondapalli spoke on “The Impact of the Rise of China on Asian Democratization”. His presentation focused on the ‘Threat of China’ and ‘The China Collapse theories.’ The speaker said that a group of twenty scholars under Zheng Bijian, Vice Principal of Central Committee Party School, had been set up dedicated to countering the Rising China Threat and the China Collapse theories. “The Rise of China” is the goal to be pursued for the next twenty years. Through mutual trust the Chinese hope to create a Community of Common Interest in Asia by 2020.

Mr. Kondapalli made an effective slide presentation, highlighting the quantitative aspects of the Chinese rise in the economic field and their presence in the Indian and Pacific Oceans. He mentioned that it is a rise in terms of comprehensive national power including both the soft and hard factors: economic construction is at the centre of the rise.

Explaining the soft power factors, Mr. Kondapalli mentioned China’s rise as a global manufacturing hub, her seat in the UN Security Council and her global influence.

Economic construction in China occurs under the centrality of the CCP in all spheres, but this underwent a drastic change during Zemin’s period. Besides economic development, opposing the US and ensuring peripheral security indicated by a heavy increase in the defence budget by the late 80s and 90s reflects the stage of building up for the rise of China.

China’s weakness internationally was exemplified during the Iraq War when she failed to shape it according to her own interests. However China will be able to influence global events by 2020 due to her “Rise.” The only uncertainty is whether she will head towards a Soft or a Hard Rise till 2020 after which she will be in a position to use coercive diplomacy like the US.

From the Chinese perspective, the international system is experiencing multiple rises including those of India, Japan, EU, Russia, Brazil and Vietnam which act as stumbling blocks to her ambitions. Now, therefore, China spends more on Diplomatic Missions and Defence.

While talking about the implications of this rise for Asia Kondapalli said that China has increased her policies of good neighbourliness especially in maritime boundary areas, is encouraging economic interdependence and giving a boost to multilateralism through organisations like ASEAN.

While answering questions about whether Vietnam is a stumbling block, Mr. Kondapalli was of the view that with its 80% literacy rate, human resource development, 4-5% economic growth and a history of conflict with China since 15th century; Vietnam has every possibility of emerging as a counter to China. And despite recent talks between the communist parties of the two countries about a possible resolution for their maritime boundary dispute, there is deep suspicion on both sides.

He also noted that in their negotiations over the Himalayan border with India now the Chinese will not talk about exchange of the Eastern and Western sectors for three reasons. Firstly, the sixth Dalai Lama hailed from Tawang which they will now claim as rightfully theirs. Secondly, one-third of Tibet’s trade can be carried through the Tawang tract. And thirdly, for the region from Chumbi Valley to the Tawang tract they have a military plan.

(This report was prepared by the group of Professor Manish Dabhade of JNU.)

Wednesday, January 11, 2006

Myanmar playing India off against China

Myanmar is becoming increasingly adept at pitting the interests of its two giant neighbors, India and China, against each other to derive maximum benefits for itself. In a sense, this is par for the course for a small, weak, country that has kept itself out of the regional and international mainstream as deliberate policy but now finds its self-imposed isolation a liability. In opening up to the world, Yangon has seemingly alighted on a two-pronged policy of engaging with China on the economic front and with India in the security sphere (which last caters to the historical wariness the Myanmarese nation have always felt for an imperial or expansionist China). Thus, it has signed an MoU to sell PetroChina 6.5 trillion cubic feet of gas for 30 years from its AI field in which the Indian public sector major ONGC Videsh Ltd holds a 30% stake, thereby ignoring New Delhi's plea to sell it gas to feed the proposed pipeline through Bangladesh into eastern India. Almost simultaneously, the military junta ruling Mynamar, dispatched a missile corvette, UMS Anawyahta, to participate in the Indian Navy's annual 'Milan 2006' exercises with the litttoral South-East Asian navies in the Andaman Sea off Port Blair. This is the first time the Myanmarese Navy has accepted its Indian counterpart's standing invitation to join in the 'Milan' Exercise. It is exected that such participation will hereafter become a regular feature of growing security cooperation.

Wednesday, January 04, 2006

China’s New Navy

The latest Congressional Research Service report on the Chinese Navy requires the attention of everyone seriously interested in Asian and global security issues. It describes a new and increasingly powerful force, being created at a very rapid pace, the mission of which is not at all clear.
to read the rest click here.

Banking in China and India

IASC has posted a richly detailed analysis of banking in China and India by William Gamble which is well worth a read. Gamble compares the China Construction Bank with India's ICICI, both loci of recent foreign investment. His central message is that the political survival of the Chinese Communist Party will, in such matters, trump considerations of economic efficiency while India's private banks face no comparable constraint. He concludes:

So when all is said and done there is no possibility that Chinese state owned banks in general or CCB in particular will ever be profitable. Any full disclosure would most likely reveal that CCB is insolvent. The party is happy to take foreign investors’ money. It is doubtful that they will give it back.

In contrast ICICI is a well run, transparent private company that is subject to both Indian and US economic incentives and disincentives. It holds primary market share in one of the fastest growing economies in the world. The Indian regulatory and legal framework is being reformed, perhaps not as fast as markets would wish, but it is occurring. They also do not need a revolution to change a moribund system. From foreign investors’ stand point, there is very little risk and an enormous potential for profit.

Tuesday, January 03, 2006

China, India and Demography - Take 2

In a recent post Harsh Pant pointed to China's demographic constraints and asked what was known about India. In this regard it is useful to look at an analysis by Nicholas Eberstadt whose punch line with regard to India is that while the north (think Bihar) will remain young the south (think Kerala) will not. He notes that this means that the young will come from states with lower socio-economic indicators, especially educational ones. In that last regard, I would like to point to the interesting piece by Sebastian Mallaby which notes that educational progress in India might be underestimated in current projections thanks to market successes. My own, anecdotal, sense is that Mallaby is on to something.

Taiwan applies (rhetorical) brakes

Of late Taiwan has appeared to be a country only dimly interested in its survival as an independent entity. While China's military buildup across the Taiwan straits has proceeded apace, Taiwan has proceeded with its economic integration with China while ignoring the imperative of building up its own military strength. Popular visits by Kuomintang leaders to the mainland have further fed the impression that more hard-nosed thinking is out of style in Taipei.
The recent speech by President Chen is a departure from this trend. He has re-emphasized the importance of Taiwan's military modernization and of diversifying Taiwan's economic ties. All if this is eminently sensible - it remains to be seen if the island's political system will permit any actual progress on this anytime soon.

Monday, January 02, 2006

The Struggle for Tibet: Is It Destined to Fail?

The Beijing-sanctioned 11th Panchen Lama in a recent interview claimed that he had been free to pursue his religious practices under the tutelage of the Chinese government. In a blatant attempt to please his Chinese protectors, he went on to claim that the Tibetans are enjoying freedom like never before. Dalai Lama has retorted and, in an attempt to clarify the situation in Tibet, has categorically rejected Panchen Lama’s assertions. He has made it clear that human rights abuses remain the norm in Tibet and Tibetan monks are being tortured and killed by the Chinese authorities. Dalai Lama has spoken with such bitterness towards the Chinese authorities after a long time. For long, he had been hoping that he would be able to bring the Chinese authorities towards some sort of a compromise position. But he has failed and China has continued with its repressive policies towards the Tibetans. The political struggle of Tibetan Buddhism is at a crossroads as life after the Dalai Lama remains highly uncertain even as the pace of immigration of Han Chinese is bound to go up even further with the opening of a railway linking central Tibet with China. Despite four rounds of talks between the Dalai Lama's representatives and Chinese officials since 2002, nothing concrete has emerged and China seems to be merely buying time. With China being seen as the next superpower, the international community also seems to be forgetting the struggle in Tibet. Are Tibetans on the wrong side of history?