“The World is Not Peaceful”

By

Vice Admiral (retd.) Vijay Shankar

Addressing senior Communist Party and government officials in Beijing, at an event to commemorate the 90th anniversary of the founding of the People’s Liberation Army (PLA), Premier Xi Jinping declared “We do not allow any individual, any organisation, any political party, at any time or by any means, to split any single piece of the Chinese territory. No one could expect us to swallow consequences that damage our sovereignty, security and developmental interests”. During the speech, Xi repeatedly emphasised that the “world was not peaceful and the military must forever stay unswervingly loyal to the Communist Party of China, as its absolute leadership over the armed forces is the PLA’s “unalterable soul and indispensable lifeline”. These comments came just two days after he addressed the PLA ground forces directly at Zhurihe in Inner Mongolia (was there symbolism attached since the geographic location was where Genghis Khan set off on his conquest of Eurasia in the year 1206 AD that cleaved political cohesion to the silk route). Here Xi announced “China must defeat all enemies that dare to offend”.

If now we were to establish who China’s enemies were, it would become amply clear who the target or targets are. No easy task this, as China has long been embroiled in a contest with Japan over the East China Sea island of Senkaku; with South Korea on rights over the submerged Socotra Rock; with Philippines on sovereignty over Spratly Island and Scarborough Shoal; Malaysia, Vietnam, Brunei over the Spratly Islands; and Indonesia over control of Natuna Island. Beijing also threatens to use force to conquer Taiwan if peaceful enticements prove insufficient. And more importantly it has flouted the UNCLOS and conventions regarding establishing a new ADIZ in the East China Sea. China also demands title over nearly all of the strategically vital South China Sea through which $5 trillion in annual shipping trade passes and is believed to sit atop vast oil and gas deposits. Its claim of possession over the waters within the so-called 9-Dash line (it was11-dash when relations with Vietnam were different) has brought it on a collision course with the USA and all the maritime stake holders of the region as the claim overlaps with those of ASEAN members Vietnam, the Philippines, Malaysia and Brunei, as well as Taiwan. And not forgetting, China was engaged in a two month-long border standoff with Indian forces over the latter’s security relations with Bhutan and its commitment to blocking a road being constructed across the Doklam Plateau (claimed by Bhutan) which could potentially act as a spring board to sever the strategically critical ‘Chicken’s Neck’ (the Siliguri corridor); it’s elites cogitated, that it would be a ‘Just-War’ to expel India. However, on 28 August 2017, the two governments announced that the crisis had been defused and troops were disengaging.

From the Indian stand point, solidarity of the Indo-Bhutanese security pact had weathered the crunch while China’s deployment of man and material for construction of the road was balked (it can hardly be a coincidence that China is to host the BRICS summit on 03 September, a dissolution of the conclave would have meant loss of face to Xi). While Indeed, China’s nuclear and strategic promotion of North Korea provides the context for alarming tensions in the entire region, the recent US and Japan imposed sanctions on a dozen Chinese companies and individuals accused of helping North Korea’s nuclear weapons programme; is perhaps, the first aggregation of a mounting series of strictures. So in near ‘epic’ terms, the question remains, who “dare offend Xi?”

Scholars in their wisdom have found three reasons for India earning the wrath of Xi. The first is India’s strategic snub to fall in line with Xi’s grandiose One Belt One Road (OBOR) scheme (never mind that it passes through disputed territory of Northern Kashmir). Secondly, the impending 19th Congress of the Communist Party of China provides a critical context for Xi to stamp his authority by “constituting his strategic policies”, in the mould of Mao when in 1964 he thrust his ‘Red Book’ and later used it during the Cultural Revolution to ram home ideological uniformity and to weed out adversaries; to have nations insouciant to Xi’s grand designs would tantamount to abasement at the highest political level. Thirdly, since sovereignty whips up the maximum nationalist emotions, it may provide some understanding to both the recent Doklam confrontation and the situation in the South China Sea. The three put together, may seem to an absolutist, such as Xi; ablation of the indices of his power.

An important symbol of political standing, clout and legacy of leadership since 1949; from Mao Zedong, Deng Xiaoping, Jiang Zemin to Hu Jintao, is to have their political theories written into the party constitution as guiding dogmas. Mao had his ‘Red Book’, Deng his ‘24 characters’, Jiang his ‘developmental dictatorship’ and even the bland Hu emblematized ‘pursuit of economic growth at the cost of legal and political reforms.’ But will Xi achieve the distinction – putting him in the same league as Mao – if his thoughts (conceivably titled, “Security, Development and Territorial Sovereignty on China’s terms) are accepted as the supervisory ideology while still in power? This, at the 19th Congress would give him the legitimacy and mandate, in a presumptive way, of the people to the exclusion of the politburo.

“The world is not peaceful” says Xi. Somehow, Chinese actions, Janus faced policies, coercive manoeuvres and rhetoric of recent times have only served to confound the script.

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A Pug, a Terrier, & the Doklam Stand Off

By Vice Admiral (retd) Vijay Shankar

This article was first published on the Peace and Conflict Studies website.

Doklam

Doklam Sector source intoday.com  Scale:0 ——– ——-50km

William Moorcroft, a British veterinary surgeon of the East India Company, set off in 1816 on an expedition to the Kailas region of Tibet to search for that breed of Central Asian horses that would revitalise the blood stock of the Company’s cavalry. His quest took him to a Tibetan official, where to his astonishment he was greeted not by his fabled strain of mounts but by two familiar breed of dogs. One a Pug and the other a Terrier, both alien to the land. So where had they come from? The answer, took a while to sink in: Tsar Alexander’s army had got here before the British.

A shadowy war was underway for control of the strategic passes, plateaus and wastelands of Tibet and Central Asia that led to India. However, Russian intent on conquest then, seemed inconceivable to the Raj. It was not till the middle of the 19th Century when the Khanates along the route fell that the curtains lifted on the ‘Great Game’. As the frontiers of the two empires loomed, it exposed the ill surveyed and poorly guarded borders of Northern India. It took the British Empire four decades after Moorcroft’s ‘close encounter’ to fully appreciate the significance of the Pug and the Terrier.

The Great Game ended after two revolutions and another half century. Yet its legacy of where the Northern frontiers of India lay remained confused, as the British used little else than artful cartography and more of imperial disdain to redraw empire. The modern Indian state has yet to reconcile this dangerous historical equivocation. Early political leadership in India had a cavalier and sometimes Arcadian perspective of history. The absence of unprejudiced attempts at defining geography has left indistinct borderlands to this day that suppurate with disturbing regularity. The region of the Doklam plateau in the tri-junction of India, China and Bhutan is one such region.

Doklam is situated roughly 15 kilometres east of the Nathu La pass that separates India and China. On the western edge of the Doklam plateau is Doka La, which connects Sikkim with either Tibet (Chinese Government Claim) or links Sikkim to western Bhutan. In June 2017, China attempted to extend a road southward across Yadong county, the wedge at the mouth of the Chumbi valley, leading to the thin edge. So, on 18 June, Indian troops crossed into the territory to prevent construction of the road. China has criticised India for entering its “territory.” With Bhutan the dispute involves, a matter of 764 sq. km of territory on the Doklam Plateau. The ‘Wedge’ has enormous strategic significance for China, Bhutan as well as India. Recall in 1962, the real anxiety was that the thrust of China’s Army of Tibet would develop on a North-South axis from the Chumbi Valley to cut off the strategically vital Siliguri corridor (Chicken’s Neck). In 1965, again, China in support of Pakistan, threatened to open this front. If China were to ever get hold of this territory, the Northeast would remain in a state of unremitting peril.

The India-Bhutan Friendship Treaty of 2007, successor to the 1949 Treaty of ‘Perpetual Peace and Friendship’, pledges close “cooperation on issues relating to national interests and security.” It mirrors Bhutanese trepidation of a Tibet encore.  Central to the current stand-off is the building of logistical infrastructure across the disputed plateau that would provide a spring board to drive across the Chicken’s neck. India along with Bhutan has stepped into the disputed area to block advancement of the road. So what has urged Beijing to incite this incident? There are three impulsions which have a bearing on the impasse: Firstly, India’s maritime manoeuvres (‘Malabar’) in the Northern Indian Ocean with the US and Japan underscores resolve to achieve cooperative security and control against an aggressive and revisionist China; India’s strategic disinclination to come on board on the OBOR for reasons of it being “long on politics and spare on economics” has not gone down well with China. Besides the China-Pakistan Economic Corridor is offensive as it passes through the disputed POK; and lastly, the Indo-Bhutan security Compact is abhorrent to China and needed to be put to test.

And what of an improbable escalation to a hot conflict? Clearly the Indian military is prepared. It is also clear that conflict will be waged on terms advantageous to India. In addition to operational manoeuvres undertaken to check China’s land forces; the superior deployable Indian Air force will endeavour to assure a favourable situation in the skies to progress operations on the ground while the Indian Navy will strive to deny the northern Indian Ocean to PLAN exertions as it exercises control over shipping in the busiest lanes of the world located in Arabian Sea and Bay of Bengal; targeting hulls bound for China. Obviously these missions are neither small in scope nor will they come without losses; an eventuality that both nations must be sensitive to will be to the detriment of their larger development goals.

And all this ado for the indifference to misplaced Pugs and Terriers.

 

 

 

The CPEC: Corridor to Chinese Coffers

This article was first published on the Institute for Peace and Conflict website. 

Is it to China that the economic benefits from CPEC are destined and is this another lease-for-debt deal?

By

Vice Admiral (retd) Vijay Shankar

Misshapen Marshall Analogy

Deceptive arguments are current that urge that the China Pakistan Economic Corridor (CPEC) finds historic equivalence in the Marshall Plan. The Plan was an American Congressional Act legislated on April 3rd 1948, in the immediate depredations of post-World War II Europe. It sought “to promote world peace (?)…, national interests, and foreign policy of the United States through economic, financial, and other measures necessary for…free institutions to survive consistent with the promotion of the strength and stability of the US.” The key phrases of the Plan were “strength, stability and national interests of the US.” Underlying it was the clash of two opposing ideologies, Communism versus Western Capitalism.

By 1946–1947, the fear of the spread of Communism among the collapsed economies of Europe, spurred the US Congress to approve funding of $13 billion ($189.35b in 2016) over a period of four years for the rebuilding of Western Europe. This life-saving transfusion generated a resurgence of West European industrialization and opened extensive markets that in turn stimulated the American economy. The strategic economic recovery programme quite deliberately precluded any involvement of either the East European economies or the Soviet Union. It resulted in a re-structured economic order that promoted European integration; it also created a vast system of commerce that complimented the domestic economy of the United States. The assertion that the Plan represented American altruism has long been debunked, as the investment in Europe not only kept the United States from regressing into depression, but also set the stage in 1949 for the creation of the mother-of-all military alliances, the North Atlantic Treaty Organisation (NATO). The gargantuan nature of NATO may be gauged by the fact that it’s combined military spending even today accounts for over 70% of global aggregate.

China: No Altruist

In this context, the CPEC is not a bulwark against an ideology; neither does it presage the threat of global armed confrontation between competing blocs, nor does China have the economic muscle to promise rapid materialization of a dominant economic confederacy. So then what is it all about? Pakistan, given the precarious internal security situation that prevails, teamed with venal politics and crumbling infrastructure, hardly provides the inducement for long term massive investment. The Wold Bank’s current economic outlook concludes that Pakistan faces,

“significant economic, governance and security challenges to achieve durable            development outcomes. The persistence of conflict in the border areas and security challenges throughout the country is a reality that affects all aspects of life in Pakistan and impedes development. A range of governance and business environment indicators suggest that deep improvements in governance are needed to unleash Pakistan’s growth potential.”[1]

While short term forecast have registered growth in the region of 4.2 per cent; given the scale, magnitude and expanse of the project the financial hazard of plunging into a debt trap is real, while falling victim to fugacious investors riding sub-sets of the project already appear to be an actuality. After all, the Chinese in their financial dealings have not shown themselves to be altruists. Several contemporary China driven international projects illustrate their covetousness:

Woes of the non-performing Hambantota port project in Sri Lanka, built with a Chinese loan of US$ 1.4 billion, have not come to an end. Even after 80 per cent stake being appropriated by China, a lease charter leading to erosion of ownership of the seaport and loss of ‘sovereignty’ over 15,000 acres of land, neither dividends nor revenues are apparent. It would be interesting to establish how ‘win-win’ the Lankans feel about the project.

Mozambique was promised more than $5 billion from China in two years 2016-18. Loans were funnelled to big construction projects. However, economists point out “projects financed by China do not contribute towards growth. Highways, power projects and railway tracks are built by mandated Chinese firms who bring own workers and materials down to the nails and hammers; credits thus flow directly back to China.” This model that neither invites local participation nor generates wealth within has left the country crippled by a debt payment crisis compounded by economic slowdown, renewed violent conflict and drop in commodity prices (main source of revenue).

Lease-for-Debt

And what of debt repayment? In both cases there appears to be a lease-for-debt deal afoot. The story of China railroading Kenya into arrears and the floundering fate of Tanzania’s $10bn Bagamoyo Port follows the same pattern.

In form, the $50bn CPEC is not just a transportation network. Comprising a portfolio of projects, the physical “corridor” consists of highways, railways, and pipeline systems running along energy nodes driving special economic zones (SEZ) intended to attract investors and entrepreneurs. The North East-South West orientation from Gwadar to Kashgar spans near 3000 kilometres. Three transportation arteries are planned for the project: a western route through Balochistan and Khyber Pakhtunkhwa; an eastern route through Sindh and Punjab and a central route crisscrossing the other two. A northern highway route connects to Kashgar, via the Karakoram. Implementation is in four parts which include: development of Gwadar Port, investment in road infrastructure, rail and air hook-ups to service the corridor and the creation of energy nodes and SEZs. $35bn is allocated for energy projects while $15bn for the other three elements. The entire portfolio is to be completed by 2030. Here again Chinese companies enjoy priority of mandate in all projects. Infrastructure and energy sectors, the backbone of the project, are government-led initiatives. They are characterised with numerous procrastinations: persistent terrorist attacks in Baluchistan, Sindh and Punjab inspire little confidence in investors while, partisan federal control is making for discord among provinces. Opposition parties suggest, with some veracity, that the government neglects the Western and Central Routes and are focused on the Punjab province.

A Conclusion: China’s Blueprint

For China, the project grants, a much hankered for, 40 years operation rights to Gwadar port, assuring a long-term strategic base in the Arabian Sea that reduces Chinese dependence on the Malacca Straits while addressing the imperative to stimulate pace of development in their restive western region (largely subsidised by the project). Availability of ‘exclusive’ zones for Chinese companies along the corridor may even suggest arrogation of prime economic spaces in what can only be termed as “neoteric mercantilism”. Financially, as suggested by columnist Khurram Husain, the $50bn investment (75% loan and 25% equity) demands debt servicing to the tune of $3.5 to 4bn annually which in turn urges an improbable 7% year on year growth. Already China, exercised by Pakistan’s inability to attract investments, has fashioned a consortium of Chinese companies that has bought out 40 per cent ownership of Pakistan’s only stock exchange. This is possibly the first big price Pakistan is paying in return for investments.

Considering all this, the question then becomes: is it to China’s coffers that the economic benefits from CPEC are destined and is this another lease-for-debt deal? Time will very soon tell.

[1] http://www.worldbank.org/en/results/2013/04/26/pakistan-achieving-results-in-a-challenging-environment