Shutting down Geelani’s Grievance Factory

Jammu & Kashmir needs a guerilla development plan

Excerpts from my DNA column:

The business of manufacturing grievances, operated by the likes of Syed Ali Shah Geelani, involves both FDI and FII. Provocateurs and hardcore separatists act as the focus of violent unrest, mobilising young people using old methods and new. Motivated or excitable sections of the media add tickers, employing terms like “intifada” and “Jasmine” (or heaven-forbid, “Gandhian”), to describe the proceedings.

The separatist game plan is to prevent the state, especially its Kashmir region, from returning to what we all like to call “normalcy”.

To halt this cycle, it is necessary to both raise the costs of protesting and the benefits of not protesting. While the political and security machinery —wiser from handling last year’s stone-pelting experience — can well reduce the attractions of a summer job as a street-protester, the state has been less successful in creating alternative occupations.

The main reason New Delhi’s outlays fail to generate outcomes is because there is a lack of capacity in the state and local administrations. Even if it didn’t make its way to the wrong pockets, it is difficult to spend that much money simply because the Jammu & Kashmir doesn’t have sufficient numbers of competent officials who can implement programmes. It takes years to raise these numbers in the best of circumstances. The problem is, young people have to be kept off the streets right now.

Kashmir needs a guerilla development plan, using unconventional tactics to quickly create an economy that engages its youthful population. According to the Economic Freedom of the States of India 2011 report Jammu and Kashmir stood 9th (out of the 20 states studied) in terms of economic freedom, moving up from 15th position in 2005. It scores better than even Maharashtra, Punjab and Karnataka. So a plan that exploits and enlarges economic freedom might do the trick.

It should create zones in urban areas where entrepreneurs can move in and start business in a matter of days. Instead of waiting for training institutes to be built, it should facilitate skills training in small batches. It should avoid handouts, and inject resources into microfinance institutions for them to lend more and to younger people.

Such a plan stands a good chance of strengthening social capital and cultivating a sense of individual responsibility. This spring’s narrative can be different if Geelani’s “Grievance Factory” is made to suffer a labour shortage. [Read the rest on DNA]

The Asian Balance: What if China becomes a democracy?

Business as usual, with some relative advantage and why we need Reforms 2.0

Excerpts from today’s Business Standard column:

It is extremely unlikely, but let’s say the fragrance of Jasmine flowers wafts across the Great Wall and perfumes China’s Han heartlands. A post-revolution China could take many forms, but let’s say that it turns into a democracy while retaining its existing international boundaries. Let’s set aside these two big “if’s” for a moment and ask what such a scenario would mean for India.

There are three fundamental questions. Will democratic China change its outlook, positions and policies with respect to India? Will it be any easier to deal with? And therefore, is a democratic China in our interests?

…it is likely that democratic China, like the People’s Republic, will see itself as the successor to the glorious empires of history (and its) geopolitical interests will not be too different from the People’s Republic’s.

There is also nothing to suggest that China will stop using Pakistan and other countries in India’s immediate neighbourhood as proxies and surrogates. Even the methods might not change. After all, if the US and France sell arms to the Pakistani army why can’t democratic China do the same? Let’s not forget that the US was very much a democracy when it abetted Pakistan’s nuclear weapons programme.

Will democracy make it be any easier to deal with the northern neighbour? Again, unlikely. Democracy in the eastern, western and southern neighbours has done little to transform their relations with India. Why should it be any different with China?

None of this implies that a democratic China is not in our interest. From a foreign policy perspective, the main reason to prefer a democratic China is to be able to mutualise the democratic disadvantage.

It is harder for democracies to doggedly pursue the quest for power. (See this post from 2006). Democracies are also more transparent. To the extent that we are familiar with Democratic China’s domestic political landscape it will be an improvement over the current situation, where we know little about the way the cards are stacked. Transparency will also make China’s politics more manipulable, and thus neutralise an asymmetric advantage that it has over India today.

Preference is one thing, capability another. A democratic, coalition-run India does not have any serious means of promoting democracy across the Himalayas. It does, however, have the power of example. The Communist Party of China contends that prosperity can only be achieved by suspending freedom. We can prove it wrong. The Beijing Consensus can be challenged, in China and outside, by fully dismantling the Delhi straitjacket, and implementing second-generation economic reforms. [Business Standard]

Reforming the home ministry’s troops

In my DNA column – why India’s paramilitary forces need structural reform

This is an excerpt from the article that appears in today’s DNA.

Why do we need BSF for the border with Pakistan, but separate forces called ITBP for the border with China and the Sashastra Seema Bal for the borders with Nepal and Bhutan? Why should the Assam Rifles be distinct from the Central Reserve Police Force (CRPF)? My colleague Bibhu Prasad Routray argues that it is a good idea to merge the various central paramilitary forces into a single force. Indeed, given that most of them are doing each others’ jobs anyway, wouldn’t it make sense to bring them under one chain of command? If this is way too radical, then why not rationalise them into three forces with distinct roles—internal security, border security and infrastructure security? This is as good for accountability as it is for the forces to develop greater competence within their domains.

In fact, massive expansion of central paramilitary forces without structural reforms could end up being counterproductive. The most important links in the internal security chain are the beat constable, the local police station and the deputy superintendent of police. Policing is a state subject. The massive expansion of central para-military forces after 26/11 belies the total refusal of all state governments to implement the Supreme Court-ordered police reforms. Indian states persist with a colonial police structure designed to keep a subject population under the rulers’ thumb. Persuading them to change is hard enough. If a state government comes to believe that it has easy access to large numbers of central forces, it will have fewer incentives to improve its own police force.

The goal of internal security should not be about sending the CRPF (and certainly not the BSF) to Hyderabad. It should be about ensuring that the Andhra Pradesh police can handle the task without outside help. [DNA]

My op-ed in WSJ Asia – Dr Singh’s leap of faith

India’s decision to resume dialogue with Pakistan is a triumph of faith over reason

The following is the original draft of my op-ed that appeared in the pages of the Wall Street Journal Asia earlier this week:

Prime Minister Manmohan Singh waited until public memory of the terrorist attacks on Mumbai on 26th November 2008 faded to a level that it was politically feasible for him to resume the composite bilateral dialogue with Pakistan. The attacks had compelled him to reluctantly suspend official talks two years ago. Despite increasingly compelling evidence that the Lashkar-e-Taiba carried out those attacks with the connivance of the Pakistani military establishment, Islamabad has preferred to engage in a dilatory game of dossiers-and-lawsuits to avoid having to take any action against the perpetrators of one of the most provocative acts of terrorism in recent years. Yet, in the absence of the tiniest acts of good faith from his Pakistani counterparts, Prime Minister Singh has dogmatically persisted with his pursuit of dialogue — a policy which last week saw New Delhi effectively yielding to Pakistan’s demand of talks without preconditions.

Dialogue for Mr Singh is neither an eyewash to satisfy the international community nor a pragmatic policy tied to outcomes. It is almost a matter of faith, oblivious to facts or reason. Continue reading “My op-ed in WSJ Asia – Dr Singh’s leap of faith”

Risk of youth bulge unrest in India

The inaugural piece of my new fortnightly monthly column in DNA

Yesterday, I wrote about how to spot the next revolution. Demographics was one indicator. Specifically the existence of a youth bulge (young people constituting a large fraction of the total population) has been found to be correlated with high levels of unrest and violence.

“What about India?” many asked. At 26, the median Indian is not only older than the median Middle Eastern Arab, but will cross 31 by the year 2026. Rising opportunities, growing incomes, a hopeful mindset, democracy and freedom of expression mean that the chances of mass unrest are slim.

But it’s important not to be caught up with the good news in the big picture, for the macro data masks the variation at the micro level. In the first installment of my new fortnightly column in DNA, I argue that the data are serious enough for us to consider youth bulge violence as a long-term risk to national security, and that the time to take mitigatory steps is now.

The dark side of the demographic dividend: So demographics might partly explain why the countries of the Middle East are unstable, but why should it concern us? Well, because the youth bulge phenomenon might put at serious risk India’s ability to benefit from the celebrated “demographic dividend”. If reasonably healthy and reasonably educated young people do not find enough opportunities then India has an abundance of grievances available to agitate them. While the 15-24 population of India as a whole will peak this year and then decline over the next decade, there are many parts of the country where the age structure indicates the risk of youth bulge unrest.

…the data are sufficient enough for us to regard youth bulge violence as a long-term risk to national security. Going by the National Commission on Population’s projections to the year 2026, Uttar Pradesh, Madhya Pradesh and Delhi will experience a net increase in young people. The numbers in the 15-24 age group will grow in Bihar, Assam, Haryana, Uttaranchal, Jammu & Kashmir, Maharashtra, Jharkhand and Gujarat. States that cannot both reduce grievances and create enough opportunities are likely to get into trouble. [DNA]

You should also look at Dilip Rao’s insightful post at Law and Other Things that I cite in my article.

Scrap offsets and foreign investment caps

Galvanising military modernisation requires radical changes to the procurement mindset

Sushant K Singh, head of Takshashila’s national security programme and an editor of Pragati has an op-ed in the Wall Street Journal’s Asian edition, commenting on the Indian government’s new, more-of-the-same, defence procurement policy. Excerpt:

The defense ministry in New Delhi won’t admit it, but the turn-around is not just a tacit acknowledgment of India’s limited capacity to absorb offsets, but also an indictment of the offsets policy itself. If the policy is to succeed, the foreign vendor should want to operate in a country where it actually derives commercial benefits from partnering with locals. But in India, the poor quality of the state-run defense units and ordnance factories rules them out as partners. The country simply does not also have a large enough private defense manufacturing sector that a Boeing or Lockheed could buy parts from or invest in.

The final nail in the offset coffin is India’s FDI policy. Which among the decrepit public-sector companies or near-absent private ones would Boeing choose from to invest in? Or, rather, which local manufacturer does it trust enough to share its proprietary technology with? A joint venture could be trustworthy, but because of the FDI cap, a local firm will have to put up 74% equity—no small potatoes in an industry where contracts easily total $100 million and upward. This is why over 10 years the 26% FDI regime brought in only $150,000 of investment.

If the Indian government wants to use offsets as an interim measure to bring in foreign manufacturers, it should do away with the FDI cap. Higher stakes in companies could help add value to the offsets policy: Boeing’s purchase of 34% of Aero Vodochody, a Czech firm, as an offset deal in 1998 is a good example.

The FDI regime has wrecked such opportunities. A proposal last year by India’s Ministry of Commerce to increase the FDI cap in defense manufacturing was rejected outright by the defense ministry. By both sheltering local firms from real competition and yet requiring foreigners to invest in them with offsets, the government wants the best of the old socialist way of nurturing its infant industries and the new capitalist way of acquiring foreign know-how. So far it has failed to secure either. [WSJ]

The Asian Balance: The East Asian kabuki

A curtain-raiser to this year’s geopolitical drama in five acts

Excerpts from Business Standard column today:

The first act began a few days ago when some online military buffs posted images of a new stealth aircraft, tested on the very day Robert Gates, US defence secretary, was in Beijing to discuss, well, military cooperation. The test surprised a lot of people — including, apparently, Mr Hu himself. The underlying message, however, should not. Powerful political constituencies within the People’s Republic not only see the US-China relationship as adversarial, but have developed the capacity to challenge US military power in East Asia and beyond. In recent years we have seen the People’s Liberation Army (PLA) deploy a submarine fleet that can counter the US Navy’s surface combatants, develop missiles that can destroy aircraft carriers and satellites, and now test next-generation fighter aircraft.

No, it is extremely unlikely that the United States and China will get into a war — hot or cold — in the near future, but China is attempting to shape a military balance that will give it greater leverage over Japan, South Korea and their primary protector, the United States. At the same time, Vietnam, Australia, Indonesia and India will either feel awed, more insecure or both. North Korea, Pakistan, Myanmar and Iran will be emboldened. Like the slow, initial act of traditional Japanese theatre, this sets the stage for the remaining acts of the unfolding drama. There are four more acts in this East Asian kabuki. [Business Standard]

The Asian Balance: Policing the Indian Ocean

Doing more maritime chowkidari

Excerpts from my column in Business Standard:

What can we do in the short term? Now, while the Indian Navy has discharged itself admirably in escorting convoys and fighting pirates, it is primarily a war-fighting force. New Delhi’s priority must remain equipping it to become a blue-water navy capable of projecting power in India’s extended maritime domain. At this time, assigning more ships to maritime constabulary duties off the Horn of Africa could risk blunting the navy’s war-fighting edge. At the same time, India must not underestimate the growing pirate menace that threatens its commerce and the lives of a large number of its seafaring citizens.

One way out of this dilemma is for New Delhi to lease a handful of commercial vessels, equip them with adequate fire power, and place them under the operational control of the Indian Navy. After all, you don’t need BrahMos missile-equipped Talwar class battle axes to tackle pirates armed with assault rifles. Operating commercial vessels on lease can be adequate to the task, is less expensive and will allow the navy’s combatant warships to focus on their core competence.

In parallel, India should use its upcoming presence at the UN Security Council to strengthen the mandate, personnel strength and international support for the African Union (AU) force that is currently deployed in Somalia. Ugandan officials have long been asking the UN for more troops so that the AU force can take effective control over Somalian territory and secure its ports. This makes sense. The challenge will be to manage the complexities of Africa’s regional politics so that the international effort has both robust international oversight and legitimacy. It is uncertain, perhaps unlikely, that the AU force will fully succeed in establishing order in the near-anarchic world of Somalian civil wars. There is, however, a good chance that it will seal off the pirates’ main launching pads.

Read the whole thing at Business Standard

Op-ed in The National: The Obama celebrations

Don’t underestimate the importance of the atmosphere

Here’s the original draft of an op-ed that appears in UAE’s The National daily today. It emphasises the importance of the popular basis of the India-US relationship.

Barack Obama will have a grand, memorable and successful visit to India merely by turning up.

Despite sinking approval ratings at home and misgivings among sections of New Delhi’s strategic establishment, he is remains immensely popular in India. Many are inspired by his life story, and many more are impressed by his style, personality and oratory. So expect a groundswell of welcome, warmth and good wishes for him when he arrives in Mumbai next week. In addition to stately official functions, India’s raucous clamour of billboards, sand sculptures, T-shirts and the quintessential Amul butter advertisement will celebrate the occasion. It is easy to get caught up in geopolitical, economic and commercial issues and understate the importance of “atmospherics”. To do so would be to miss the point.

The mutual popularity of the two countries forms the bedrock of the India-US relationship: and because both countries are democracies, this creates powerful political constituencies pressing the two governments towards each other. According to the Pew Global Attitudes Project, two out of three Indians polled have a favourable opinion of the United States. In fact, 73% of the Indians surveyed said that they have confidence in Obama, compared to only 65% of the Americans. Americans return the favour. A recent Gallup poll reveals two in three Americans have a positive opinion of India, with younger people even more favourably disposed. Pro-India lobbies in Washington and pro-America lobbies in India are set to grow stronger and more numerous with time.

This doesn’t translate into New Delhi and Washington taking identical positions on all issues, but is a powerful driver towards their convergence. It also allows policy disagreements between the two governments to be placed within an overall positive context, and permits both to say “No!” to each other without the fear of jeopardising the relationship. So, just like Prime Minister Manmohan Singh’s state visit to Washington last year, President Obama’s trip to India next week should be seen as both acknowledging and reinforcing the bottom-up basis of the relationship at the very highest level.

In the pre-trip press gaggle, White House officials were at great pains to project the visit as focussed on Mr Obama’s domestic agenda of creating jobs. They pointed out that India is the second fastest growing foreign investor in the United States (after the UAE) and Indian companies support over 57,000 jobs in the country. The US-India Business Council estimates that deals signed during the trip could create or sustain as many as 100,000 jobs in the United States. While they got that part of the messaging right ahead of the mid-term Congressional elections, the Obama administration’s defensiveness over the issue of outsourcing reflects its inability to appreciate that it ultimately benefits US consumers, especially during hard times. This remains a concern for India’s highly competitive services industry.

Indian analysts, however, are aware that creating jobs in the United States is important to India. As my colleague V Anantha Nageswaran suggests, India should not make too much noise about short-term protests against outsourcing and “buy more stuff from the US which it is still good at making.”

If the hot-button political issue in Washington is unemployment, in New Delhi it is terrorism. US authorities have extended genuine co-operation — albeit not to the extent that their Indian counterparts desire — over the investigations into David Headley’s involvement in the 26/11 attacks on Mumbai. With Headley’s confessions — in the presence of US officials — squarely implicating the Pakistan’s ISI agency, it is no longer possible for Washington to plausibly pretend that terrorism has no official sanction from Pakistani state institutions. Now, by deciding to stay at the Taj Mahal hotel in Mumbai and meet victims of the terrorist attack, Mr Obama has done well to signal his commiseration, if not solidarity, with the Indian people. However, he will not be spared tough questions on his administration’s equivocal attitude towards the source of that terrorism.

In two years, Mr Obama has traveled the distance to reach the same point over Pakistan as when he took over — that the Pakistani military-jihadi complex will not yield to US demands beyond a point. In two years, he has traveled from believing the notion that the United States and China can co-operate in a “G-2” to recognising that a strong partnership with India is critical to US interests in Asia. So when he travels to India next week, both Washington and New Delhi share a common understanding of the problems they face. Where they differ is on what the solutions ought to be.

That, however, won’t spoil the party.

The Asian Balance: Recognising good neighbours

My new monthly column in Business Standard is called The Asian Balance. It “will devote itself to chronicling and interpreting the unfolding geopolitics of East Asia. It will be a unabashed advocate of Looking East far beyond the Straits of Malacca. Rebuilding the economic, cultural and political relationships that India historically shared with the countries and the peoples to its East has never been more important to our future than it is today.”

The first piece is up. Here’s an excerpt:

Three factors will shape the Asian balance: first, nuclear weapons—what I call the New Himalayas—will shift the India-China contest away from a direct military conflict along the land border. It will take place, among others, in and around the Indian Ocean. It will play out in the form of increased Chinese presence in the waters off India’s coast and renewed US engagement of Asean countries. The big question is to what extent will India be a player in areas that China considers its backyard.

Second, the small- and medium-sized countries of the region will prefer a balance where no single power dominates over them. If they do not see this forthcoming, they are likely to join the stronger side. What this implies is that the importance they give to their relationship with India will depend on their assessment of whether New Delhi has the capability, and the will, to contribute to the balance.

Third, unless there is an addition to the number of nuclear powers in East Asia, there will be a preference to create and work through regional multilateral institutions like the Asean Regional Forum (ARF) and the East Asia Summit (EAS). The absence of direct nuclear deterrence in the Western Pacific has emboldened China to claim almost the entire South China Sea as its own. All the activity in East Asia trying to form one big workable grouping is premised on the unfounded hope that a powerful China will play by the rules it promises to. [Business Standard]