Better Late Than Never

Better Late Than Never

 SAARC today is no longer about India and Pakistan grandstanding and checkmating each other. And consequently blocking every collective  resolution. Bilaterism has entered its blood-stream ever since Narendra Modi became Prime Minister of India, and decided to take on India’s regional responsibilities. And this time, at Modi’s first SAARC Summit, he made it clear that if something could not happen unanimously, it would go through to implementation anyway.

 Seeing the changed atmosphere, Pakistan too has agreed to the proposed SAARC electricity cooperation. This came soon after the Modi-Sharif handshake however. And well it might. Pakistan, particularly Nawaz Sharif’s home state of West Punjab, is starved for electricity! But the speculation remains- is the Pakistan Army going to stand by Prime Minister Nawaz Sharif’s commitment?  

There has been a fast evolving build up to this Summit. Every head of Government from SAARC, except Bangladesh, who had an unavoidable prior engagement, came to the inauguration of the Modi Government. Then, the first country Modi visited as Prime Minister was Bhutan, followed soon after by Nepal. He signed bilateral agreements for a host of things in both places, and pledged to finance them of behalf of India as well. But money is, indeed, at the root of the new efficacy.

Who will pay for SAARC to turn into a looser version of the EU then? This may not feel like a happy question at this time, but things were not always this dire. And, some benefits of a united Western Europe, such as the freer movement of goods, services, people, and jobs, are still evident.

Still, broke as the EU is today, there is no getting away from the bills piling up on the German and French desks, as the strongest economies in the region. It is up to them to keep the ship of union afloat, because the weaker hands cannot.

 Likewise in SAARC, all the smaller constituents must appreciate the Modi Government’s outreach. But they also know the answer about the pay- master with the really deep pockets that wants in.

The revived cooperation right now promises to lead to more road, rail and electricity links. And bigger trade without high tariff walls if it can be pulled off. Pakistan, never happy about giving India a walk-over, second in size, with the bigger nuclear weapons arsenal; came to the table very obviously hyphenated with China.

India knows that there is no containment agenda practicable in these globalised and multilateral times. But while China, the undeniably alpha power of Asia, has been active for quite some time, developing and financing projects everywhere in SAARC, as well as Myanmar to boot; India has only now begun to come to the party.

The scenario is definitely evolving and changing. India was not even invited to APEC in Beijing as an Observer early in November, but only to a preparatory meeting, to rustle up support for China’s ‘Silk Road’ plans.  Modi did not choose to go, but it is a gradual process of induction in statecraft, with several quid pro quos along the way. Pakistan went, as Observer, (and protégé), to the main APEC Summit, and came away with Chinese pledges of $45 billion in investment for itself.

Under President Xi Jinping, there are the ‘Silk Road’ initiatives, backed by money and infrastructure building know-how, which seek to connect every country in the region to China, and then across Central Asia to Europe- by road and rail, in addition to air.

And then there is the ‘Chinese Dream’ policy, being employed to persuade Taiwan towards reunification with the mainland. The latter is a ‘hearts and minds’ effort, being used in the SAARC region as well, a velvet-gloved hegemony, though not quite to effect an absolute merger.

India, as the biggest country in SAARC, is, in fact, China’s most lucrative potential business opportunity in the region today. China has the men, the know-how and the means. India definitely has the need, the appetite, the inclination, and the market size.

There is already nearly $80 billion in trade between India and China, heavily tilted in favour of Chinese exports, and it is headed towards $150 billion soon. The Modi-Jinping Summit in India in October was, without a doubt, the beginning of hundreds of billions in FDI involvements. More than any other nation in the world today, China is flush with surplus and investible funds. Its formidable infrastructure building capacity is being tapped all over the world. It most recently won a bid to build a $12 billion railway in Nigeria, for example. China, even as an Observer, has also just pledged $ 30 billion for SAARC region roads.

And the next SAARC Summit, let us note, will indeed be hosted by Islamabad, but by then, India’s influence with China may have grown considerably.  

(796 words)

November 27^th, 2014

Gautam Mukherjee