Europe – The Acorn

On Hollande’s mind

Indeed, a closer relationship with New Delhi is vital to France’s continued standing as an important global power in the twenty-first century. It was far sighted on behalf of the French to initiate a strategic partnership with India in 1998. From the Cold War era to recent times, New Delhi has had in France an independent-minded partner unhesitant to buck the Western consensus on defence, space and atomic energy issues. It is for the Modi government to build on that relationship and enlist France as a partner to extend India’s own geopolitical profile.

What the French president might encounter in India

This is the English version of a piece that appeared in BBC Hindi today

When President Francoise Hollande arrives in New Delhi next week as the chief guest on India’s Republic Day celebrations, he will be taking a short, partial break from his two main preoccupations: how to reduce unemployment in France ahead of the 2017 presidential elections and how to ensure that the threat from home-grown Islamist terrorists is contained.

In addition, he will no doubt be concerned about the economic trajectory of the euro zone, the prospects of long-term instability in Syria and the Middle East and, ultimately, of the risks to France’s geopolitical standing in the twenty-first century.

The honour, symbolism and pageantry apart, where does India register in President Hollande’s agenda? The immediate, tangible prize is to bring the long-drawn negotiations over fighter aircraft and nuclear reactors to fruition, which might together be worth $30 billion or more. The devil, as usual, is in the detail, and an agreement might prove elusive until the last minute. These deals matter for Mr Hollande not only because it will help him stay on the right side of politically powerful business interests, but also because they could create thousands of skilled jobs.

Mr Hollande had pledged not to stand for re-election if he “failed on growth, failed on unemployment, failed on the recovery of the country”. So a boost in jobs, investment and growth is important to his own political prospects. Given that unemployment rose to from 9.7% to 10.1% during his term, disproportionately affecting younger people, it is small wonder that he declared an economic emergency earlier this month.

If these important defence and energy deals are what Mr Hollande hopes he can take back with him, he would do well to explore how India is tackling its own employment creation challenges.

In fact, France and India have common problems on this front, in terms of restrictive labour laws, choke-hold by trade unions and a skills gap. Indian businesses like TeamLease Services, Ma Foi Randstad and others have developed experience in creating employment in an environment where there are powerful regulatory and political-economic disincentives for direct hiring. (Disclosure: Manish Sabharwal, co-founder of TeamLease is a donor to my institution). If Mr Hollande were to spend some of his time meeting Mr Modi’s officials dealing with skills and employment generation, he might carry home some good ideas in addition to the good deals.

While France and India share some similarities in the internal security context, the nature of the threat is different: for France it comes from its own citizens disgruntled with its foreign policy; for India it emanates from across its borders. Therefore even if the Paris attacks and 26/11 appeared similar, how they materialised is different. Therefore, while India and France could discuss counter-terrorism cooperation and better share intelligence, there are limitations to the extent they could go.

Similarly, India’s role in assuaging French worries over the Eurozone crisis is limited.

In recent years, France has increased its commitment to the security of the Indian Ocean. By virtue of its possession of islands of La Reunion and Mayotte, and their accompanying vast Exclusive Economic Zones, France considers itself a stakeholder and power in the Indian Ocean. It also has bases in Djibouti and Abu Dhabi that support its military interventions in Africa, the Middle East and Afghanistan. In contrast, its capacity is limited east of the Malacca Straits.

Given that India’s own maritime footprint is significant in the Western Indian Ocean (including a diaspora in La Reunion) there is a degree of strategic contestation between the two powers in this part of the maritime space. On the other hand, shared interests in freedom of navigation indicate a scope for greater collaboration on the Eastern part of the ocean. Both Paris and New Delhi realise that this calls for closer dialogue between the strategic establishments of the two countries and regular exercises between their armed forces.

India’s position on Crimea

Don’t rush to take sides.

This was my response to a journalist’s question on what I thought of India’s position on Russia’s annexation of Crimea.

India neither has important interests nor the capability to be a useful player over Ukraine and Crimea. It is therefore sensible for New Delhi to let those with interests & capabilities play it out and deal with the outcomes. In any case, the Crimean case conclusively shows that the UN Security Council cannot be relied upon to uphold and enforce the UN Charter.

If Russia’s annexation of Crimea leads to a wider armed conflict then New Delhi will have to review its position.

The Acorn's Power Principle Matrix — Power & Principle Matrix

For context, see this post on the Power & Principle Matrix. Taking gratuitous moral positions is not a good way to conduct foreign policy. Let’s not forget that the principle of territorial integrity that the United States and European Union are invoking over Crimea was overlooked with respect to Kosovo a few years ago. A different principle—mass atrocities against the population—was invoked then. Clearly, interests determine which principle is evoked in international relations.

Explica a ABC el analista indio

Quoted in the Spanish

Jaime León, a reporter for the Spanish daily ABC, quotes me in his report on India-China relations. Here’s my opinion in Spanish.

«Los dirigentes chinos están preocupados por la creciente relación entre la India y Estados Unidos. Li Keqiang es el primero en decirlo públicamente», explica a ABC el analista indio Nitin Pai, director del «think tank» La Institución Takshashila. Y es que la desconfianza india hacia china es antigua, profunda y difícil de eliminar. «La guerra de 1962, que los indios piensan que fue una traición, continúa viva en la memoria colectiva en la India», afirma Pai, quien añade que «además, el apoyo de China a los insurgentes del noreste indio y el apoyo nuclear a Pakistán han ayudado a aumentar ese recelo». A su juicio, «es un hecho que China va por delante de la India en muchos aspectos, desde el económico al militar. En la percepción india, China es un adversario estratégico superior con un historial de hostilidad directa e indirecta hacia la India». [ABC]

When Italy behaved like a rogue state

Turning a legal issue into a geopolitical one has raised the stakes and hurt bilateral relations.

The Italian government reneged on its commitment to the Indian Supreme Court and unilaterally refused to return two of its marines, under trial in India for murdering two fishermen in India’s waters, after they were allowed to visit home first for Christmas (Christmas!) and second, to vote (vote!). (See an earlier post on the legal issues relating to this case)

The Supreme Court order, issued by a bench headed by the Chief Justice Altamas Kabir, allowed the accused’s petition on the basis of an affidavit filed by the Italian ambassador and based on the surety of his (and thereby the Italian government’s sovereign-) guarantee. Unlike the earlier instance when the Kerala High Court permitted them to visit Italy for Christmas, the Supreme Court did not ask for any bond to be posted. The Court can perhaps not be faulted for presuming that the written promise made by a member-state of the European Union can be trusted, but left itself exposed to a risk of default. Because the Italian ambassador enjoys diplomatic immunity, he cannot be charged in a criminal or civil suit—a norm which the Italian government abused in this case. The Court has limited options now.

The action has shifted to the geopolitical domain. As of this writing, reports indicated that New Delhi has decided to expel Ambassador Daniele Mancini. [See these storified tweets on the subject.]

Samanth Subramanian and Suryatapa Bhattacharya report this matter in The National where they quote me. My detailed responses were:

What sort of diplomatic fall out can we expect, if any?

The UPA government will be under pressure to react to what is clearly a breach of law, faith and norms of engagement between civilised states by the Italian government. The Indian Supreme Court went to the remarkable extent of letting the undertrial marines off for Christmas and voting based on the presumption of good faith. So New Delhi will have to act — although at this point it’s not clear to what extent the UPA government will go.

Do you think expelling the Italian diplomatic mission and recalling the Indian mission from Rome will send across the point that India’s judiciary and government is serious about prosecuting the two Italian marines accused of killing the fishermen?

It’s highly unlikely that the two marines will be sent back to India for trial. So what actions New Delhi takes — including expelling the ambassador and the military attache and downgrading bilateral relations — will essentially have signaling, punitive and deterrent value. New Delhi will have to signal that it will not let illegal actions by foreign governments go unpunished. It will then decide on how much it can and it should punish the Italian government. Finally, to the extent that setting an example dissuades others from treating the Indian judicial system with contempt, New Delhi’s response can act as a deterrent.

Mostly though, New Delhi’s actions will have a signaling value, with some degree of punitiveness.

Who should be held accountable for this breach of trust?

This is hard to answer. Clearly the Italian government is responsible for acting like a rogue state, not a civilised member of the international community. That said, it was unwise for the Indian government and Supreme Court to accept Rome’s bona fides because its leaders and officials have consistently demonstrated their contempt for the Indian judicial system right from the start. The Supreme Court allowed the marines to leave based on the word of the Italian ambassador, but surely the Union government’s counsel could have argued its case more strongly.

On NDTV’s The Social Network show last evening, I argued that this issue will affect bilateral ties and potentially even India-EU relations.

India’s role in Europe’s financial stability

Should India offer to bail Europe out?

A few days ago in his Mint column, Narayan Ramachandran, Takshashila geoeconomics fellow, argued that India must directly offer to bail out Europe.

In an INI9 (9 Minute conversations) segment recorded yesterday, Narayan and I discuss this idea further.

Does Europe matter?

As India’s interests and outlook grow more global in scope, it seeks a compelling narrative for relations with Europe

What is the future for the India-Europe relationship in the coming decades as China narrows its relative power differential with respect to the United States? Going by contemporary experience, the unfortunate answer is perhaps “nothing more than a transactional relationship”.

Yet there is much to suggest a closer strategic relationship: both from the perspective of ensuring liberal, democratic norms remain pre-eminent across the world, to convergence of interests over issues of global governance to addressing common security threats like international terrorism. Absent a grand narrative connecting these dots into a coherent pattern of a strategic relationship, it appears that India and Europe will continue to remain on two sides of transactions, albeit an ever growing number of them.

As we construct a comprehensive geopolitical vision for India in the twenty-first century, I am struck by the relative poverty of the India-Europe agenda. My thesis of India being a geopolitical swing power between a still pre-eminent United States and a rising China argues that India must develop better relations with these two than they have with each other. It also indicates that New Delhi must develop a broader geopolitical leverage on a number of issues that can compel the United States and China to ensure that India’s interests are protected.

While I can envisage what this entails for India’s policy towards East Asia, Central Asia, Russia, the Middle East and Africa, I do not clearly see how what it means for Europe. This is partially due to Europe’s own foreign policy course over issues ranging from commitment to stabilising Afghanistan to the enlargement of the European Union, and indeed, with its approach to handling an increasingly diverse demographic.

Will Europe be so pre-occupied in evolving its domestic order to be a potential partner for India in the geopolitical space? How much will Europe compromise its liberal democratic values in order to accommodate geopolitical pressure from China and its Eastern periphery? Even if Europe and India agree on the definition of common problems, will their respective internal political dynamics allow them to see eye-to-eye on the solutions? Moreover, does there exist in Europe a school of strategic thought that sees a partnership with India as necessary for addressing the challenges of the twenty-first century?

Pragati February 2009: Pakistan needs a MacArthur

Here’s the February 2009 issue of Pragati, a special on Pakistan.

This issue argues that if a stable, prosperous and peaceful Pakistan is in the common interests of India, the world’s major powers and indeed the wider international community, then it is incumbent upon them to engage in a MacArthur-like intervention to transform Pakistan. Merely providing more financial assistance, albeit under different budgetary heads, is unlikely to suffice. In fact, as our in-depth look at one of Pakistan’s biggest jihadi organisations suggests, the export of terrorism from the country is only likely to grow.

In a discussion on India’s options, we examine the role of the use of force; surgical strikes are a fallacy, but credible military capabilities are a necessity. And as the book extract shows, there is a need for skilful diplomacy to use external pressures to bring about internal changes in Pakistan.

In a second perspectives section, we review Pakistan’s relations with its key benefactors—the United States, Saudi Arabia, China and Europe—and highlight how the dynamics of these relationships are changing. The composite picture suggests that after the terrorist attacks on Mumbai, and the arrival of the Obama administration, there is an opportunity for India to engage in bold, imaginative diplomacy to galvanise the international community to radically change Pakistan’s course.

Pragati – The Indian National Interest Review
Issue 23 – February 2009

Contents [Download 2MB PDF]

PERSPECTIVE

MacArthur should return
Only an international intervention can transform Pakistan
Nitin Pai

Pakistan 2020
Nine alternative futures
K Subrahmanyam, Pakistan Planning Commission, United States National Intelligence Council, Sohail Inayatullah, MD Nalapat, Nadeem Ul Haque, Stephen P Cohen, Rohit Pradhan & Harsh Gupta and R Vaidyanathan

FILTER

Essential readings of the month
Ravi Gopalan & Vijay Vikram

IN DEPTH

The assembly line of international terrorism
Why the threat from Jamaat-ud-Dawa is set to rise
Wilson John

PERSPECTIVE

Surgeries are messy
Surgical strikes are a conceptual fallacy and not a prudent option
Srinath Raghavan and Rudra Chaudhuri

Kind words and guns
Effective diplomacy needs credible military capacity
Sushant K Singh

Allies, not friends
The US and Pakistan will need to recast their awkward relationship
Dhruva Jaishankar

A flawed sense of security
The Saudi-Pakistan relationship, underpinned by opportunistic security interests, has run its course
Bernard Haykel

New dynamics of an all weather friendship
China’s influence in Islamabad has been subordinated to US priorities in the region
Zorawar Daulet Singh

Europe’s dilemma
Europe can do little in solving Pakistan’s problem
Richard Gowan

BOOKS

The logic of containment
Using external pressures to bring about an internal transformation
C Raja Mohan

From India, with no love

India’s outrage over David Miliband’s gross insensitivity and atrocious behaviour was near universal. After a scathing critique of Mr Miliband’s words and antics, a Mint editorial held that "Miliband’s misadventure in India is unlikely to have any lasting impact on relations between India and his country; it will, however, leave a bad taste for some time to come."

As far as the sophisticated world of diplomacy goes, the Indian government has delivered the necessary rebuke. After official rebuffs and leaks, Prime Minister Manmohan Singh has supposedly written to his British counterpart and "conveyed India’s disappointment on his behaviour and comments." And it appears that verbal expressions of displeasure will continue for a while longer.

But that’s clearly not enough. While Mr Miliband might well be faulted for the manner in which he delivered the message, he was articulating the British government’s position. Now, if the British government believes that it need not necessarily fight the jihadis who attack Indian citizens, then it behooves India to reciprocate. Suspending intelligence and security co-operation is in order. Will this hurt Britain? It’s hard to say. But let Britain work that out.

It’s not NATO’s fight

And there’s no fight in NATO

You hear about leaked diplomatic memos, resigned assessments by British field commanders and complaints by pundits—but it is when you read reports like this one, about German commandos twiddling their thumbs for three years (yes, three years) sitting in their camps, that you know why the Taliban are getting so powerful. (linkthanks Pragmatic)

Frank-Walter Steinmeier, the foreign minister, admitted they had not been deployed “a single time” in the last three years, despite a desperate shortage of Special Forces units in the country.

Last year it emerged that Norwegian troops, fighting alongside their German allies, were forced to abandon a battle at tea-time because German pilots refused to fly emergency medical helicopters in the dark. [The Scotsman]

NATO’s military presence in Afghanistan is hobbled by a spaghetti bowl of “caveats” placing various types of restrictions on the where troops from individual countries can be deployed and their rules of engagement. For an organisation whose purpose was to standardise equipment and procedures and ensure interoperability,this state of affairs is as ironic as it is shameful.

Perhaps they should just pack up and leave.

Understanding the global financial crisis

Credit asphyxiation

Ajay Shah describes the reasons for the crisis, and the current panic…

Once a financial panic starts, only government intervention can solve it. Once trust is lost, only governments, with the power to print money and pay off debt through future taxes, can offer credible financial guarantees, and get the financial sector to work again.

An ideal big government effort at resolving these problems would involve three elements. It would involve stemming the bleeding of housing-related securities that are available at fire sale prices and are very illiquid. It would involve a government induced and policy supported mechanism for financial firms to raise fresh equity capital, going beyond the hundreds of billions of dollars that financial firms have raised by themselves. And, I think it would have to involve some mechanism through which the top 20 financial firms would get a detailed look at each others internals, so that they can start trusting each other and the money market can sputter to life.

The Paulson plan which has obtained support from lawmakers in the US is explicit about the first element: the US government will buy something like $700 billion of housing-related securities. This is a step in the right direction. But the other two problems remain : financial firms are low on equity capital and don’t trust each other. We continue to live without a money market. [Ajay Shah/FE]

…and what might solve it.

One of the most promising elements of a policy response has come from the UK on Tuesday. This involves three elements: liquidity injection to compensate for the collapse of the money market, guarantees for medium financing of banks, and equity injections into eight banks. Key design features of this package, and the magnitudes of resources involved, appear to have improvements compared with the American efforts. If this leads to a revival of the money market in London, this would mark a major step forward in resolving the crisis.
[Ajay Shah/FE]

Related Links: Niranjan Rajadhyaksha on how the crisis might affect the Indian economy, and what the Indian government should do about the global crisis.