The Waheed regime’s games

New Delhi must punish Maldives’ Waheed regime, but without playing into its hands

Mohammed Waheed Hassan’s regime seized power through dubious means. It now seeks to acquire domestic popularity and external support by reneging on an airport operations contract with India’s GMR group. Contrary to its claims, the matter is not merely an issue of the business case turning out to be different than what was previously assumed. If that were so, it would not declared that it is expelling GMR and would select a different airport operator. Renegotiating with an existing vendor is less expensive, less difficult and more reasonable course of action if the intentions were purely commercial. [This ANI report has more details about the project]

The high-level politics of this is clear. The Waheed regime seeks to bolster its ‘nationalist’ credentials by showing it can take on the big, domineering neighbour. It seeks to acquire external support by playing on the India-China contest in the Indo-Pacific. If New Delhi can be provoked to react punitively, the Waheed regime gets the space to court Chinese or other foreign companies. That it was emboldened to attempt such a move is an indicator of New Delhi’s failure of neighbourhood policy.

What should New Delhi do now? First, it should not provide the Waheed regime the excuse it seeks. Diplomatic relations, economic ties, tourism and aid must not be suspended. Second, India should bolster the democratic opposition to the Waheed regime—including Mohamed Nasheed, who happens to be the legitimately elected president—and turn the heat on its illegitimate hold on power. Third, New Delhi must encourage GMR and Axis Bank to use the Singapore courts—the jurisdiction chosen by the contracting parties—to the fullest extent.

The arbitration verdict might well have gone in favour of the Waheed regime, but the Singapore court has stayed the eviction of GMR. If the Waheed regime refused to comply with the court’s orders—as it has declared it will—GMR can seek legal recourse. Similarly Axis Bank might have a case against the Maldives government if the latter has a sovereign guarantee obligation and does not discharge it. The Maldives government has financial and fixed assets in Singapore, which can be targeted by GMR & Axis Bank’s lawyers.

New Delhi has risks to its reputation at stake. If governments of the region come to expect that expropriating Indian companies will be inexpensive and will not have bad consequences, there is a greater chance that they will engage in such behaviour. The Waheed regime must be made to incur the costs of its politics. Not bluntly, though.

The issue will take on an entirely different dimension should the Waheed regime use force against Indian nationals, or engineer or condone violence against them. In such circumstances, it is proper to keep all options on the table.

Damming the Mekong

Who can resist China?

While researching for today’s Business Standard column I came across Ame Trandem’s article in Vietnam’s Than Nien newspaper on the controversy relating to the Xayaboury (Xayaburi) dam in Laos. Here’s an excerpt of my subsequent email interview with Ms Trandem:

Nitin Pai: What is China’s position on the downstream dams that Laos is building & Thailand is financing? China is not in the Mekong River Commission (MRC) but are they playing a role in the shadows?

Ame Trandem: While China is not a member of the MRC, it is a dialogue partner. However China’s own upstream dam construction on the Mekong has helped pave the way for the Lower Mekong mainstream dams to re-emerge on the region’s agenda. With four dams built on the mainstream in China, its dams have begun changing the river’s hydrology and sediment flow, which has helped ease past reluctance in mainstream dam building.
Continue reading Damming the Mekong

The Asian Balance: On the East Asian dance floor

It’s up to you to find your partner

In my Business Standard column today argue that “the (East Asia Summit) club only provides the dance floor. India will have to court its dancing partners on an individual basis.”


[Although] the EAS is set to become the pre-eminent regional grouping, bilateral alignments remain in a state of flux.

A divide is emerging between countries that have a dispute with China, and countries that don’t. The former — a list that includes Japan, South Korea, Vietnam, Philippines, Malaysia and Brunei — will seek greater security in the form of alliances with the United States and India.

These countries want a closer tango, not least in the security arena. During Defence Minister A K Antony’s visit, his Vietnamese counterpart General Phung Quang Thanh welcomed Indian Navy ships to make more port calls and offered maintenance facilities at Vietnamese ports. Last month, South Korea signed two defence cooperation agreements with India encompassing a broad range of activities, including exchange of visits, R&D, training and joint exercises. An agreement is still some distance away, but the very fact that India and Japan are currently negotiating a civil nuclear agreement is already a sign of how far Tokyo has travelled.

India will have to go beyond defence and invest in building deep, broad and balanced economic relationships with these countries. As the experience with Russia has taught us, a merely defence-centred bilateral relationship can often be troublesome.

On the other side of the divide, Thailand, Indonesia, Singapore and even Australia — countries which do not have territorial disputes with China — while desiring an outcome where the big powers balance each other out, will be reluctant to do anything that might attract Beijing’s unpleasant attention. Not unlike the Hindu and Buddhist kingdoms of historical South East Asia that preserved their independence by paying nominal tribute to the Chinese Emperor in return for being left alone. [Business Standard]

Pax Indica: East of Singapore

The waters east of Singapore hold the key to the lands west of the Indus

Yesterday’s post was about the developments in East Asia. In today’s Pax Indica column, I argue that India must be part of the security equilibrium in that region. Excerpts:

India’s strategic power projection will not be unwelcome in South East Asia. It will also enable the United States to remain engaged in Afghanistan-Pakistan by freeing up resources that might otherwise be employed in the western Pacific. Also, regardless of what the United States does, an Indian strategic commitment in East Asia will strengthen its overall negotiation position with China.

Whatever might have caused China to bully its neighbours this year, it has opened another window of opportunity for India to engage with the region. Pre-occupied as it is with the game in the north-western part of the subcontinent, it is unclear if New Delhi sufficiently realises that the seas east of Singapore hold the key to the lands west of the Indus.

India must vastly increase its economic, diplomatic and military presence in and beyond South East Asia. [Yahoo! India]