East Asia Summit: An exhibit of Asian institutionalism

The EAS displays few concrete results and this is a problem that is symptomatic of most multilateral institutions in the Asia-Pacific region. 

By Hamsini Hariharan (@HamsiniH)

The 11th East Asian Summit (EAS) concluded last week after adopting declarations related to infrastructure development, migratory flows and non proliferation. The Summit which brought together 18 Heads of State made headlines more for the bilateral meetings held rather than the outcomes of the summit itself. For example, Prime Minister Narendra Modi also attended the 14th ASEAN-India Summit and held meetings with Shinzo Abe, Barack Obama, Li Keqiang, Dmitry Mendvedev, Aung Sun Suu Ki, Park Geun-hye, Thongloun Sisoulith amongst others. India brought up issues of terrorism financing, the RCEP and India’s membership into APEC as well as India’s position on the South China Sea. However, there were few other takeaways.

The evolution the EAS has been coloured by ineffectual meetings and bland rhetoric. The East Asian Summit has its roots in the regional institutionalism pioneered by the Association of South East Asian Nations (ASEAN) in the 1990s. At the end of the Cold War, ASEAN attempted to spearhead new security architecture for Asia. The basis for this was the ASEAN+ X format. In 1994, the ASEAN Regional Forum (ARF) was formed. In the aftermath of the Asian Financial Crisis, the ASEAN+3 included Japan, China and South Korea to catalyse the processes of regionalism. This expanded into the ASEAN+6 as it was widened to include Australia, New Zealand and India. Eventually, it admitted Russia and the United States and this grouping came to be known as the East Asia Summit (EAS). The EAS was to serve as the precursor for a larger East Asian Community built along the same lines as a European Community.

One of the main contentions about the EAS during its formation was its membership. China was keen to limit membership to East Asian countries alone and was hesitant to allow India and Australia into the group for fears of dilution. However, membership continued to increase and the EAS is one of the avenues where leaders are brought to discuss issues of regional scope having wide ranging impact.

Institutionalism in Asia has been weak and built with the explicit to keep it that way. Unlike the formal, majority decisionmaking structures illustrated by the European Union and other regional institutions elsewhere in the world, institutions in Asia prefer an informal, consensus based approach. The best example of this is the ASEAN whose style of negotiations have been described as ‘The ASEAN Way’. Supporters laud ASEAN’s processes while realists discard it as an effectual talkshop. While ASEAN’s merits and demerits as an organisation have been espoused and contested, it remains one of the few, functioning regional institutions in Asia.

Multilateralism in the Asia-Pacific region has not been successful either in the economic or the security spheres. One reason is the lack of desire of states, who are generally suspicious of regimes that would take away their strategic autonomy. However, the excessive focus on inclusivity and soft regionalism, dialogue and consensus mean that the EAS currently agrees on very little. Characterised by geopolitics and rising contentions in the Asia-Pacific, the loopholes of institutions in fostering cooperation is becoming more apparent than ever. Meanwhile, multilateral institutions allow for corridor diplomacy and declarations of commitment. How far this will go in socialising countries into regional or global norms is yet to be seen.

Hamsini Hariharan is a Research Scholar with the Takshashila Institution and tweets at @HamsiniH

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Look out for MJC’s reaction to India’s changed articulation on Balochistan

India must be prepared for two responses — one from the MJC and one from the putative state of Pakistan

by Pranay Kotasthane (@pranaykotas)

For the first time in many years, focus of the India—Pakistan discussion has veered from the familiar topics—Kashmir and cross-border terrorism originating in Pakistan—to Balochistan. After PM Modi’s reference to “the people of Balochistan” in his 2016 Independence Day speech, two immediate effects are clearly observable: one, the Baloch nationalists dispersed across the world have received greater attention from a completely new set of audiences. This has added much-needed vigour to their waning campaign against the atrocities committed by the Pakistani state in Balochistan. On the other hand, the intensification of the rhetoric has been met with one of the most brutal crackdowns by the Pakistani establishment within Balochistan—67 were killed and over 150 were reported missing in August alone.

The idea behind this post is not to gauge the wisdom or the folly behind the PM’s statement on Balochistan for such an exercise is futile.  Given that the wheels have already been set into motion, it would be worthwhile to ask: how will Pakistan react to this escalation from India?

To understand Pakistan’s reaction, it is critical to note that there will be two different responses because Pakistan is not one geopolitical entity, but two. The first is a putative state; currently represented by a civilian government and a civilian de-facto head of state, having its own flag and other paraphernalia that make it appear like a sovereign state. The competing entity is not just the military, as it is generally held. Instead, it is a dynamic syndicate of military, militant, radical Islamist and political-economic structures, which pursues a set of domestic and foreign policies to ensure its own survival and relative dominance: what we call the military—jihadi complex (MJC).

The MJC and the putative state of Pakistan, both will react differently to India, depending on their own capabilities and intentions. My colleague Nitin Pai explains this duality of response through this analogy:

So when New Delhi engages Pakistan, it is like one batsman against two bowlers bowling simultaneously. Just when you think you’ve played a great shot—a solid defensive one or a flashy hit over the bowler’s head—you realise that you’ve been bowled by the other bowler before you’ve finished your follow- through. The doppelgänger is always there, even if you declare you aren’t going to face him. Even if you ignore him. Even if, as it turns out, you accept that he is a part of the bowling team.

Thus, India must be prepared for two responses — one from the MJC and one from the putative state of Pakistan.

First, let’s see the response of the putative state: there are hardly any new tools in Nawaz Sharif’s retaliation bag. The first response will be: Kashmir. At international forums and at bilateral diplomatic meetings, the Pakistani state will try to make the Kashmir issue central to any discussion on India and Pakistan, once again. Internally, it might consider conceding some grounds to Baloch nationalist demands in order to negate the negative propaganda. CPEC will again be posed as a panacea for Balochistan’s problems. In what could be an indicator for times to come, a string of development projects were announced on 2nd September by Nawaz Sharif — a dam, Gwadar Free Zone, Business Complex and a University. 

The more interesting question is: how will the MJC react? the MJC will definitely see India’s act as a provocation and will be considering a retaliation to shift the focus off Balochistan, particularly when it is on the rampage there. The distraction can come in the form of: a terrorist attack on the lines of Gurdaspur and Pathankot. Or in the form of heightened infiltration attempts in the Kashmir valley. Internally, there will be a campaign to highlight that the discontent in Balochistan is a result of Indian intelligence agencies. One can also expect the MJC to bring Kulbhushan Jadhav back into the zeitgeist.

Regardless of the two reactions aimed against India, India’s pitch for the Baloch cause will have significant repercussions on the internal power play between MJC and the civilian leadership. And in the current scenario, the MJC will start with momentum in its favour. This is because a strong, shared culture is a cornerstone of the MJC—a powerful force that keeps the various nodes together. And perhaps the most important feature of this shared culture is a deep-seated antagonism towards India. With a wider set of options, covert and overt, available at hand, the MJC is always in a better position to project itself as the true protector against evil designs of the Indian state. 

The internal power struggle gets further convoluted when one brings into account the impending change of guard at the helm of the military, in two months time. While Nawaz Sharif would want to project that he’s in charge, the Indian angle in Balochistan will play to the advantage of the Pakistani military in particular. The next two months will help us gauge how the Balochistan issue affects civil-military relations in Pakistan.

Finally, a reaction there will be from the MJC. The question is, is the Indian government prepared to manage the consequences of MJC’s retaliation? Answering this question is critical for calculating the true costs or benefits of India’s escalation on Balochistan.

Pranay Kotasthane (@pranaykotas) is a Research Fellow at the Takshashila Institution.

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Structural Reforms: What are they and how do you go about it?

BY Anupam Manur (@anupammanur)

No democratically elected government with a limited term of office would want to risk negative popularity in the short term for potential benefit in the future, for which they might not be able to take credit.

The microeconomist’s universal answer to all questions is demand and supply and the macroeconomist’s version is structural reforms. So goes the joke. Kaushik Basu, Chief Economist of the World Bank, in fact tweeted something similar: “Structural reform is safe advice. No one knows what it means. If economy grows: I told you. If it stalls: You didn’t do structural reform.”

So, what exactly constitutes structural reforms? From the political angle, The Economist looks at structural reforms as changes to the way the government works. From an economic viewpoint: it is about making markets work efficiently in the various sectors of the economy. An IMF paper[i] describes structural reforms as: “They typically concern policies geared towards raising productivity by improving the technical efficiency of markets and institutional structures, and by reducing or removing impediments to the efficient allocation of resources”. In fact, changes in the Ease of Doing Business rankings, published anually by the World Bank, signifies the various structural reforms undertaken in any country.

Structural reforms gained popularity from the IMF and World Bank. The two global institutions would attach preconditions to the loans that they provided to countries. These conditions were known as Structural Adjustment Programmes (SAP). Only upon initiating these reforms would a country be eligible to get loans from the IMF or World Bank. These reforms included:

  1. Trade liberalisation: Removing barriers to trade, decreasing tariffs and quotas, exchange rate liberalisation, and minismising the government’s involvement in trade.
  2. Balancing budgets: Governments had to impose strict austerity measures to reduce the fiscal deficit and create a roadmap for repayment of the loan, which involved raising taxes and cutting down expenditure.
  3. Reigning in inflation by imposing tighter monetary policy conditions and removing government’s influence in the central bank’s functioning.
  4. Removing many state controls on production, subsidies, price controls, etc.
  5. Encouraging investment by removing regulatory hurdles. This applied to both domestic and international (FDI) investment. This also involved market deregulation in most sectors of the economy.
  6. Improving overall governance structures, reducing corruption, etc
  7. Privatization and divestment of large public sector units.

Much of the Fund’s current work still revolves around the same issues. In the latest Article IV IMF staff consultation with member countries, their recommendations for most of the countries bordered around the same issues: initiate structural reforms: the United States has to reform its primary education, while France has to balance its budget and urgently carry out labour market reforms; Japan needs structural reforms to inspire more migration to mitigate the demographic crisis, and Brazil need to reduce the fiscal deficit, inflation, corruption in the government, undertake financial market reforms, and so on.

Most empirical analysis does bear out the fact that structural reforms matter to increasing productivity and GDP growth. However, there are a lot of conditions under which structural reforms work. Most countries try to undertake structural reforms when they are in crisis – either out of their own volition in order to fix the broken systems or by command from the IMF and World Bank. The success of the reforms depend upon a number of factors, such as the initial conditions, strength of existing institutions, speed of reforms and the sequencing of the reforms. After the disintegration of the USSR, for example, many countries undertook structural reforms in order to move to a market based economy. Each country followed a different approach and the ensuing results very varied. The Central and Eastern European countries fared far better than the former Soviet Union countries.

There are two important political economy factors at play that determine the success of structural reforms. The first is the time lag between the implementation of the reforms and the eventual positive effects of the same. Most empirical research shows that there is a considerable lag before the positive effects are played out in the economy, be it in terms of increased growth, reduced inflation, increased employment or higher trade. In between, however, it is not uncommon to see short term pain and a dip in growth. This explains why most countries are still reluctant about implementing big reforms. No democratically elected government with a limited term of office would want to risk negative popularity in the short term for potential benefit in the future, which they might not be able to take credit for.

Closely related is the second political economy factor of managing the winners and the losers. Every big reform will create multiple winners and losers. Economists such as Roland suggests that a gradual approach to reforms would allow an opportunity to giving compensating tranfers to losers from reforms to buy their acceptance.

The former Swedish Finance Minister, Anders Borg, has written an insightful article on the ways to tackle this particular problem. One of his biggest advice: front loading. “When structural reforms are implemented close to an election, the short-term impact will dominate the debate, and the more nebulous long-term gains will be written off as uncertain forecasts.” Thus, this should be done early enough after a government is formed to allow for some of the positive effects to come through before the next election.

Anupam Manur is a Policy Analyst at the Takshashila Institution.

[i] “Structural Reforms And Macroeconomic Performance: Initial Considerations For The Fund”, IMF Staff Reports, November 2015.

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On how politics play out in dual cities

The increased politicisation of the urban land problems brings out the duality in a city.

Solomon Benjamin in his paper, ‘Occupancy Urbanism: Radicalizing Politics and Economy beyond Policy and Programs’ explains the limitation of urban policies due to what he calls occupancy urbanism. As per Benjamin the occupant urbanism refers to spaces where,

Poor groups, claiming public services and safeguarding territorial claims, open up political spaces that appropriate institutions and fuel an economy that builds complex alliances.”

The urban institutions respond to the needs of the poor group who in turn provide benefits such as guaranteed access to the voter list in the elections. One of the most sought after commodity in this bargain is the land. Land, being a scarce resource and a basic necessity, is a highly valuable a commodity in the cities. Benjamin has indicated towards this aspect of the land. As per him,   

“Land (rather than Economy) as a conceptual entry, helps reveal subtle, often stealth-like and quiet, but extensive forms of political consciousness.”

This high value of land makes it an important leverage for the political parties during the elections. In addition to the ‘vote bank’ politics, the high real estate surpluses from large-scale land development has also made land a highly desirable commodity for international donors and the real estate developers. Hence, on one hand the slums continue to expand, on the other hand the real estate builders work towards attaining the surplus that can be derived from large development projects. The sharp conflict between the elite focusing on the land for its surplus while the slum dwellers using their political bargaining power to keep hold on it brings out the dualism in the cities.

As defined by urban sociologist  Manuel Castells, one of authors of ‘Dual City: Restructuring New York’, dual cities are 

“urban systems that are ‘spatially and socially polarised between high value-making groups and functions on the one hand and devalued social groups and downgraded spaces on the other”.

The dual city is a phenomena common around cities where the distribution of resources is starkly uneven. Amongst Indian cities such streak polarity can be seen between regions like Dharavi and Colaba in Mumbai. Colaba is the posh end of the city known for the proximity to the Mumbai’s Central Business District while Dharavi’s claim to fame is that it is of the largest slum in the world. The duality is clearly visible in the way the resources like water supply, digital connectivity etc. are distributed between the two regions.

With the cost of living in a city increasing, this polarisation has only become more prominent. The incessant migration and the rising land value of a city has made the contestations between the real estate developers and the slum dwellers sharper.

One of the solutions to this urban polarity can be to increase accountability at the local level such that the vote bank politics can be replaced with the community participation. The increase in participation will help reduce the nexus between the local political agents and the slum dwellers. Also the urban planners should look at the planning in real timeline in order to reduce the conflict  between the various stakeholders in the city.

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Don’t Hold Your Breath for the G-20

The G-20 Summit this weekend will see world leaders descend upon Hangzhou. How much will be accomplished considering the G-20 has been meandering since 2010?

By Hamsini Hariharan (@HamsiniH)

Over the last few months, Chinese media has depicted the G-20 Hangzhou Summit as a major upcoming milestone in global governance. Media Reports claim that the Summit’s agenda includes issues ranging from global taxation, innovation, growth, investment, climate change, trade barriers to even anti-corruption. How much will the G-20 be able to deliver on?

The Answer: very little.

It will do us well to question what the G-20 has actually achieved in the last six years. It was the primary coordinating agency after the 2008 Financial Crisis and came up with the standstill policy. At the 2010 Seoul Summit, there was a 6% quota rebalancing to emerging countries in the composition of the executive board of the IMF. The 2011 and 2012 Summits were overshadowed by the Eurozone Crisis. At the Cannes Summit, it was suggested that the IMF would provide additional financing to Europe as a whole rather than a single country. Japan led the pack with 60 billion dollars while the BRICS countries followed suit but the US remained aloof from the efforts. In 2013, the G-20 for the first time, addressed political contentions, particularly the Syrian civil war and the use of chemical weapons. In 2014, the Brisbane Summit saw leaders pledge to lift GDP by 2% by 2018. However, there is little evidence to prove that most countries are departing from their national policies to meet their commitments. The 2015 Agenda simply reiterated the need for meeting past commitments.

Thus, broadening of its agenda beyond international financial reform has also meant that the G-20 has had little impact on anything. The counter argument is that the G20 is a deliberative body rather than a decision making one. However, the purpose of deliberations is to drive decisionmaking at some level. The G-20 always possessed a feature of complementarity: it was to work alongside other major international institutions. However, reform of international institutions has proven to be a long arduous task and the G-20’s assumption of other tasks (comparable to the agenda of multiple other international institutions) will bear little fruit.

The main problem with the G-20 is that it is unable to deal with the power politics amongst its members. Given the unanimity requirement in the organisation, an issue is pushed off the agenda if there is a considerable opposition from several G-20 members forming an issue specific coalition. Agenda Setting dynamics within the G-20 generally pit developing and developed countries against each other. On the other hand, China which is the global growth engine and the US, still the global superpower, both seek to dominate the G-20 agenda. This is addition to individual countries attempting to carve out special deals for themselves. This cacophony of voices is one of the reasons that the G-20 has failed to deliver.

The G-20 is important for corridor diplomacy however, G-20’s importance boiling down to corridor diplomacy cannot be regarded as a success in any sense of the term. The main problem with the G-20 was that it was a minilateral envisioned to have taken the most important powers into consideration for effective deliberation. However, this minilateral is not small enough to align nations’ strategies and is beset by concerns of national interest.  The 2016 G-20 agenda is too wide a net for any effective outcomes. The only way forward is for the G-20 to prioritise its most important issues and stick to its original mandate: answering systemic economic challenges.

Hamsini Hariharan is a Research Scholar with the Takshashila Institution and tweets at @HamsiniH

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The Lampost Framework: Why India Struggles With the Implementation of (some) Reforms

The ecosystem for implementation of reforms in India is structurally setup to solve acute, visible problems, but not chronic issues that require long-term monitoring.

By Akshay Alladi (@akshayalladi)

In much of our public policy discourse, many Indians are dismissive of state capacity. Much of what is run or managed by the state is shoddy- shabby hospitals, poor schools, crumbling roads and only intermittent power.

However, on closer examination, there are some areas where the Indian state’s performance is not just adequate, but indeed quite spectacular. Conducting elections in a free and fair manner, the eradication of polio through one of the largest public health programs in the world etc. are remarkable achievements.

Consider the case of polio eradication: The campaign was started only in 1995, and the total coverage of the target population was 99.7%! The WHO has now declared India to be totally polio free. Just a decade ago, the universal vaccination coverage in a state like Bihar was only 30%

What explains this seeming paradox?

If you look at it, a pattern emerges of the sorts of reforms the Indian state implements well, and what it doesn’t. The state manages to get several children into school, but fares very poorly on learning outcomes. It has been very successful in the eradication of diseases such as polio, but does badly on delivering healthcare in general. With the Mangalyaan mission it managed to reach Mars at an incredibly low cost, but struggles in delivering high quality science education to a broad mass of people. And as noted by Nobel laureate Professor Amartya Sen, the Indian state has prevented any famine from occurring in modern India (unlike in China or much of the developing world), but has a very poor track record on malnutrition.

The acute and the chronic

The pattern to note is that the Indian state does relatively well in handling “acute” conditions- that is those that require a specific intervention, for a limited time period, and with a clear, visible goal- which can measured at relatively low cost. The Indian state however struggles with chronic conditions- those that require painstaking management over a longer period of time, and where success is not as readily visible, so considerable cost and effort is required to measure progress.

The reason in some ways is the nature of Indian democracy. In Amartya Sen’s landmark work ”Democracy as Freedom” he asserted ”No famine has ever taken place in the history of the world in a functioning democracy”, and the reason he adduced was that democratic institutions—regular free and fair elections, independent courts and legislatures, free press and vibrant civil society—are all effective mechanisms of upholding the basic rights of citizens and would prevent a famine by providing effective feedback and pressure on the Government to act.

But why do the same mechanisms then not work in solving problems of a more chronic nature?

The lampost framework

To explain why reforms are difficult to implement in India (as opposed to why they are difficult to formulate and pass) I propose a new model (called the “lampost” framework). This framework  builds off the key concepts of Allison/ Elmore’s models as well as a modified version of Kingdon’s window specific to implementation (see schematic below). To illustrate the framework I use the case of sanitation or open defecation (OD) as an example.

Schematic1

Several initiatives, such as the recent Swachh Bharat, and the earlier Nirmal Bharat and Total Sanitation program (TSP) have sought to eliminate open defecation, but have progressed only on toilet construction, but not on the Information, Education and Communication (IEC) to improve toilet usage. Even now an estimated 600 million Indians defecate in the open, and only 46% of the toilets built in Year 1 of Swachh Bharat are reported to be used.

Explanation based on the framework: Absence of toilets is measurable at low cost, and building toilets is a one time activity addressing an acute issue (shortage of toilets). Hence, both for the media and for the public at large, by bounded rationality there is far greater emphasis on toilet construction and voters are rationally ignorant about toilet usage.

Though the media does highlight non-usage of toilets, such information is anecdotal, just given the high costs of gathering large scale information on toilet usage (a chronic condition). Hence, from a “demand” standpoint  it is easier for agenda setting on toilet construction (which then gets into the window of policy implementation), rather than usage (which is left out of the window).

The “supply” analysis is as follows: As a rational response to the “demand” side, both politicians and the bureaucracy prioritise toilet construction as a visible, measurable win; this is also because the allocation to IEC is lower (in fact it has been reduced to 8% of total funds in Swachh Bharat from an already low 15% earlier).

Given resource constraints the Government also cannot get a new, specialized implementation workforce focused on IEC- e.g., out of 76,108 Swachhata Doots required, only 8890 were recruited, the Communication and Capacity Development Units (CCDUs) that were supposed to implement this did not have dedicated staff, and had multiple objectives (Source: Arghyam Trust).

Hence the ‘bureaucratic actor’ who has multiple objectives, but not the commensurate capacity, rationally deprioritises the part that is less funded, and less measured- i.e., IEC. As an example of this behavior, in Himachal Pradesh IEC was initially prioritised with very good results for toilet usage, but as central allocation (and measurement) became far higher for construction, the bureaucracy prioritised construction, reversing the gains on sanitation.

The top down design of the sanitation program, also gave the line level bureaucracy very little autonomy or say in the policy design (as shown by the Himachal example)- hence from an Organizational Development standpoint the motivation to implement is lowered.

IEC and on-going toilet usage also depends on the last mile of the state- most of whose members are drawn from the same society who share the same prejudices about sanitation and are hence imperfect agents of change in social behaviour.

Finally, the activities of on-going maintenance and monitoring require coordination between multiple agencies. For example to build and maintain running water in the toilets, local officials must cooperate across more than 10 departments to obtain the relevant information, inputs and clearances as well as work with citizens and panchayats. These departments all have different objectives and priorities, and hence implementation for on-going maintenance is much more challenging.

I call this the “lampost” framework after the droll story about the medieval philosopher Nasruddin Hodja; when Hodja lost his keys he famously looked for them only under the lampost even though he likely dropped them elsewhere, because as he reasoned- what is the use of looking for something in the dark where it cannot be seen anyway! Much of the decision making in the Indian policy making is governed by the same principle- which explains the focus on visible wins that will be noted by the media, and hence the people, as opposed to the intervention that is likelier to have impact but is harder to measure.

This framework explains why India is good at solving acute issues/ crises/ one-time goals such as preventing famine (as Amartya Sen showed) or eradicating polio, but bad at implementing policies to address chronic issues that require sustained implementation and monitoring such as sanitation, malnutrition etc.

Akshay works in the e-commerce industry, and was a management consultant serving clients in the financial services and Government spaces. He is also an alumnus of the Takshashila GCPP13 Cohort.

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India’s Stance on Export Control Regimes

An analysis of India’s positioning towards various Multilateral Export Control Regimes displays a trend of norm creation- norm adherence and agenda setting.

By Hamsini Hariharan (@HamsiniH)

India has low reserves of uranium required for its civil nuclear energy programmes. While India has been attempting self reliance in the field by substituting thorium as the primary nuclear fuel in its three stage nuclear cycle, it still suffers from lack of uranium in its reactors. India would also benefit from nuclear technology that it did not have access to during the Cold War because of its isolated road to self sufficiency.

India did not sign the Nuclear Non Proliferation Treaty (NPT) and detonated a nuclear device, ‘Peaceful Nuclear Explosion’ outside the NPT norms in 1974. Restitution was quick as the London Club (which then became the Nuclear Suppliers Group) was formed in order to restrict nuclear supply only to countries that have signed the NPT. India relied on indigenously built nuclear facilities for the next three decades until it tested its nuclear device in 1998. India faced harsh criticism for the tests and countries like Japan and the United States even imposed sanctions on the country. However, the world’s opposition to India’s nuclear stance was to change. In 2005, the US-India Civil Nuclear Deal was a pathbreaking deal as it changed the US approach towards India’s nuclear programme. This was instrumental in providing India with an NSG waiver in 2008. India was to be considered a defacto nuclear power and allowed to trade with the Nuclear Suppliers Group. In 2010, the Indo-US Joint Statement outlined India’s case for multilateral export control regimes (MECRs). Since then, India has taken intensive efforts to synchronise its export control mechanism with those of different regimes.

While the MECRs all focus on curtailing the supply of sensitive technology, India has focused on improving its own proliferation record, by streamlining its export controls with those of various international regimes. The Foreign Trade (Development and Regulation) Act No. 22 of 1992 or FTDR is the principal legal basis for India’s strategic trade control system. The Indian government uses its own export control list known as the Special Chemicals, Organisms, Materials, Equipment, and Technologies (SCOMET) list. It has also identified some groups as being more important than others: Currently, the diplomatic efforts are geared towards the NSG and the MTCR because entry into the Wassenaar Arrangement and the Australia Group both hold entry into the former groups as a precursor.

The following is an analysis of various export groups and India’s relationship with them:

Name of Export Control Regime Nuclear Suppliers Group
Stated Aim of the Regime “Non-proliferation of nuclear weapons through the implementation of restrictions on nuclear exports and nuclear-related exports.”
India’s Position Applied to NSG on May 10, 2016.

India has been keenest on NSG membership because the 48 member group contains supply of nuclear fuel. The NSG was formed in the aftermath of the Indian Peaceful Nuclear Explosion in 1974, and was one of the instruments used to isolate India in the nuclear domain. In 2008, it did provide India a clean waiver to allow it to engage in nuclear commerce. However in 2011, the NSG went back on its 2008 India- specific waiver by instituting new guidelines. The implications of the new guidelines are that it has made the Nuclear Non-Proliferation Treaty (NPT) even stronger and wants India to join the Treaty.

India’s membership to the NSG is thus important because it allows India to be a part of future norm making in the nuclear domain. As geopolitics always trumps international law, it is possible that the rules of the group can be changed in the future. By being within the rulemaking mechanism, India can ensure that the norms are aligned with its national interests.

 

Name of Export Control Regime Missile Technology Control Regime
Stated Aim of the Regime “Voluntary partnership to curb the spread of delivery systems, particularly proliferation of missile and unmanned aerial vehicle technology capable of carrying a 500 kg payload for at least 300 km.”
India’s Position Acceded to MTCR in 2016

The main benefit of the MTCR is that it controls missile technology, particularly drone technology that India could potentially gain access to. India’s Brahmos missile, made in conjunction with Russia has a range of 290 km, just under the limit of the MTCR. In the 1990s, the MTCR had protested against the sale of Russian cryogenic engines to India as it supposedly flouted group norms (Russia was a part of the MTCR) and put political pressure until the sale was dropped. Joining the MTCR could prevent similar political pressure against technology transfer. However, an important caveat is that missile technology transfer does not depend on the MTCR alone. Member Countries have traded despite flouting MTCR norms as they are voluntary and non-conforming. Therefore, India does not necessarily need to be part of it to conduct trade but it does add to its political capital.

 

Name of Export Control Regime Wassenaar Arrangement
Stated Aim of the Regime “Promotes transparency of national export control regimes on conventional arms and dual-use goods and technologies.”
India’s Position India has been streamlining its SCOMET list with the Wasenaar Arrangement

Members of the Wassenaar Arrangement have to maintain rigorous national export control systems and have to be members of or be acting in accordance with the NPT, MTCR, CWC, and the UN Register of Conventional Arms. While the group is said to be easier to gain membership than some of the other export control regimes, India is looking to gain membership only after it gains entry into the NSG and the MTCR. India has been streamlining its SCOMET list, its FTDR and also passed the WMD Act in 2005. Membership in the Wassenaar Arrangement presents one less political hurdle in getting access to sensitive technology. It is important for India’s soft power to be seen as a responsible exporter of technology.

Name of Export Control Regime Australia Group
Stated Aim of the Regime “Through the harmonisation of export controls, seeks to ensure that exports do not contribute to the development of chemical or biological weapons”
India’s Position India became a dialogue partner in 2015

The Australia Group looks at harmonization of international export controls on chemical weapons precursor chemicals. As India’s chemical and biotechnology industries grow in size and stature, being a member of the Australia Group would provide India’s commercial ventures with political legitimacy as well. However, it has few other benefits.

 

Name of Export Control Regime Arms Trade Treaty
Stated Aim of the Regime “To prevent and eradicate the illicit trade in conventional arms and to prevent their diversion to the illicit market, or for unauthorized end useand end users, including in the commission of terrorist acts.”
India’s Position India abstained from signing the Treaty in 2013

While India was an integral part of negotiations on the Arms Trade Treaty, it did not sign the treaty because India’s sovereign right to trade in arms could be impinged by the regime. It also wanted stronger action on illegal arms trade. It also contends that the ATT limits itself to arms sales rather than transfers which creates an inherent loophole for countries to take advantage of. India is the largest importer of arms in the world and is thus, any treaty on arms trade need to take the country into consideration. Illicit arms trade, particularly in the neighbourhood is a worrying factor and the Arms Trade treaty is an important step in regulating it. However, unless the Treaty is made stronger in essence, it will not be in India’s national interest to sign it.

 

Name of Export Control Regime Chemical Weapons Convention (CWC)
Stated Aim of the Regime “To exclude the possibility of the use of chemical weapons”
India’s Position Signed the CWC on 14 January 1993 and ratified it in 1996

India has been an active proponent of the CWC and in 2009, it became the third country to destroy its stockpile of chemical weapons. While India has been accused by Pakistan of using chemical weapons, the accusations did not bear fruit. Indeed, India’s chemical industry is expansive and India has demonstrated its intent to be a part of counter proliferation of chemical weapons by aiding the Organisation for the Prohibition of Chemical Weapons.

An analysis of India’s participation at various multilateral export control regimes shows India’s proactive efforts in being perceived as a responsible nuclear player. India has been an integral part of the norm creation process by participating in negotiations. However, it does not enter into treaties or join organisations which do not comply with its core interests such as the Arms Trade Treaty. On the other hand, even if India lies outside the regimes, it has followed international norms either by passing domestic laws such as the WMD Act of 2005 or setting up its SCOMET. Now, India is using its position to be join regimes which will provide it a seat at the agenda setting table. In this way, it will make sure that the norm making mechanisms in the future will be in conjunction with India’s national interests.

Hamsini Hariharan is a Research Scholar with the Takshashila Institution and tweets at @HamsiniH

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When Internationalism Fails

By Ramanjit (@patialablue)

While International bodies enable cooperation, sharing of resources and compatibility of laws, there exist inherent perils of bureaucracy without democracy. In the absence of transparent communication and channels of participation, international bodies might be seen as authoritarian.

Brexit is a stunning example of failure of a supra-state, the European Union. 28 diverse nation states constitute this confederation that facilitate a common currency, cross border mobility and free trade. The union’s constitution and parliament set a basis and framework for political cohesiveness. The EU was seen by many as a model of global integration. Jeremy Rifkin, author of The European Dream: How Europe’s Vision of the Future Is Quietly Eclipsing the American Dream, predicted EU to be a future world superpower.

Alas, the European Union is far from perfect. And it just got even further from it. An influential member, Britain recently voted decisively to exit the union. A referendum to leave Europe was won by those who voted to leave by 52% to 48% for stay. The referendum turnout was 71.8%. There could be more exits. France, the Netherlands, Italy, Austria, Finland, and Hungary might run the idea of holding referendums in the future to reconsider their membership in the Union.

The above challenges in the EU point to serious fault lines of international organizations. EU is almost perfect with its arrangement of institutions like the Parliament, the central bank and Court of Justice of the European Union. But starkly wanting is demos — the people. EU easily comes across as a super-nation without people of its own. While the structure of EU allow for extreme mobility across nations, this automatically does not bring people together. An Italian might still see a French as one his own. A European Union will not necessarily create conditions for a deeper “European” identity.

But an Italian might find himself among Polish or Greeks competing for his jobs or public goods. And it is not a hard guess that he might feel a sense of resentment. His resentment is an easy political capital for ultra nationalist political parties that build narrative against migrants and evoke fears that they will take over the country. The success of such a narrative was well demonstrated during Brexit.

A citizen has almost no influence over the international body that his country might be a member of. However, his life is impacted by the decisions taken by that international body. The EU model includes a European parliament, however the parliament does not have the right to frame legislations. The International body then appears as authoritarian.

Political mediation and communication are key to balance the bureaucratic isolation and autonomy of international institutions. A fine balance of fulfilling the demands of international institutions and aspirations of the home constituencies is not just desirable but pertinent. The argument is not against internationalism but for creating institutions that don’t derive their legitimacy merely from the consent of member nations but also through sturdy mechanics of accountability and transparency.

In conclusion, the answer to the fear of authoritarian Internationalism is not less internationalism. There is no one answer but it will be good to explore methods that allow citizens to participate in the organisations that exist for them.

Ramanjit is a Research analyst with the Takshashila Institution and tweets at @patialablue

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ICT and the perception of a city

The advent of Information and Communication Technology has changed the perception of cities along with urban designing.

In the last two decades Information and Communication Technology (ICT) has modified all the three aspects of a city- economic, social and political. The evolution has been such that ICT has even changed how cities are perceived.

In a chapter in his book “Urban Theory and the Urban Experience”, Simon Parker explains how the perception of cities is getting closer to the idea conceived by sci-fi writers like H G Wells than the urban sociologists like Bruges. Parker expands on how the movement from the machine age to the information age has affected the organisation of capital, labour and space altogether. The most recent examples being the increase in the amount invested by the venture capital funds on startups completely based on internet. The growth of ICT has altered the idea of an industry from being a machine centric unit to a human centric unit. Hence the cities which were defined by the large industries in the neighbourhood have shifted to IT oriented spaces.

This evolution of the organisation and the economical structure has had a major impact on the cities. Parker has broken down the impact of ICT on  three broad areas- first, based on the impact on the physical cities, second, on the urban designing, and finally, how ‘urban’ is perceived in the cyber space.

The impact on physical city, the first broad area, is visible clearly from the present condition of the shopping malls. With the rise in the electronic retail options, the decline in the social relevance of malls as both the shopping and a public space is lost. The easy delivery services and low storage cost has worked in favour of both the buyer and the sellers. The impact doesn’t stop at economic factors though. The virtual world has also affected the relevance of city spaces. For instance, the once thriving fan clubs keeping the cafes in the city alive have all shifted to online forums. It is an outcome of these changes that has eventually penetrated into the current urban designing and planning.

Urban designing is an outcome of the city spaces and resources within the city. The nature of the key economic sector plays a vital role in designing how the public infrastructure is designed. For instance, in the case of Bangalore, the IT capital of India, there are various Tech Parks across the city serving to the needs of the booming IT sector. In other major cities like Mumbai, the financial capital, the expansion is based on the commercial complexes that house various head offices. 

Moreover, the increase in the ICT has modified the way traditional cities were perceived. For instance, with the increase in electronically mediated meeting places, the cost spent on the actual office infrastructure is reducing. The phenomenas like work from home or startups originating in the rented houses are becoming a phenomenon. Hence, the city now are designed to attract highly skilled labour into low cost city spaces that are highly connected both physically and virtually.

This interaction between city spaces and the virtual world is not one sided. As much as the virtual world has modified the perception of cities, the current urban theories and imagination also tend to seep into the virtual world. A common claim with the rise in ICT was of a decline in traditional dense cities. However, as also mentioned by Simon Parker, the rise in ICT is concentrated within the dense metropolis more than the rural ends. Hence, the proliferation of ICT is still reliant on the tradition features of a city like agglomeration economies, and highly integrated networks.

It is therefore evident that the rise in ICT might change the idea of a city from being a cluttered space covered with smoke from the nearby industrial belt to a set of residential and corporate structures relying on ICT to make the city work.

Devika Kher is the Program Manager for Graduate Certificate in Public Policy and a policy analyst at Takshashila Institution. Her twitter handle is @DevikaKher.

Image source: Telectroscope aperture at London City Hall showing Tower Bridge and Canary Wharf, Wikipedia 

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Nuclear War: Is Our Complacency Misplaced?

By Ganesh Chakravarthi (@crg_takshashila)

The Cold War taught us many things. It compelled nations to judge every action against potential worldwide consequences. Most importantly, it taught us that  nuclear arms should never be taken lightly.

With the fall of the Iron Curtain the whole world breathed a sigh of relief. However, neither the end of the Cold War nor the Nuclear Non-Proliferation Treaty have stopped nations from developing new nuclear weapon systems. With countries increasing their nuclear arsenals and non-proliferation talks faltering, one has to wonder if a sense of complacency now permeates the global nuclear scenario.

The Stockholm International Peace Research Institute (SIPRI), an independent international institute dedicated to researching conflicts, armaments, arms control and disarmament, conducted research which revealed that there are more than 15,000 nuclear weapons in the world and that about 1800 of them are always kept in a state of ‘high operational alert.’ SIPRI further states that all nations with nuclear capabilities are developing new technologies or upgrading their current nuclear weapon systems. This brings forth the question of the relevance that a traditional treaty like the Nuclear Non-Proliferation holds in the current global order.

No nation seems to be heading towards disarmament. The rise of Asian powers, the tensions between India and Pakistan, and China advancing its nuclear arsenal are all pressing concerns. There is also the growing discontent in the Middle East where Israel is already a nuclear power and there are suspicions that Iran is on the road to becoming one.  The situation is only compounded by the fact that Saudi Arabia, Egypt and Turkey are vying to gain political supremacy in the region, which has resulted a dangerous balance of power in the Middle East.

The Cold War created a bipolar situation between two major superpowers, the U.S. and the U.S.S.R, potentially pitching their arsenals against one another. This concept of duality has been transplanted on to other players in the game i.e. India-Pakistan, Iran-Israel and so on. The question is, is this bipolar approach still relevant in a post-Cold War era?

The time has now come to not be limited by this bipolar framework and consider analytical models that have more stakeholders. This may be essential considering the threat of a nuclear Armageddon in a world that is becoming more and more interdependent. Although the concept of a ‘world state’ seems far away, there is a pressing need to develop more effective measures for cooperative security to ensure nuclear safety. Disarmament is central to the entire process while security cooperation and arms control are categorical imperatives.

Given the failing non-proliferation talks, the world needs to look at potential new treaties which can take into account emerging nuclear powers as well as offer methods for non-nuclear nations to have a say in the process and potentially take part in the codification of nuclear disarmament norms.

A number of countries across the world have divested landmines and cluster munition producers. A potential road to disarmament could be the adoption of divestment in the production of nuclear weapon components. For instance, the Norwegian and New Zealand Government Pension funds have already implemented such schemes. Additionally, the Swiss War Materials Act has been revised very recently which prohibits the financing of nuclear weapon producers.

The stigmatising of nuclear weapons and the potential release of large financial streams tied to their production could compel several countries to go towards disarmament. All this underlies a democratisation of the disarmament process which has not happened yet.

The Cold War saw the world almost resigning to the inevitability of a nuclear Armageddon. It is up to us now to ensure that the world is not as helpless as it once was.

Ganesh Chakravarthi is the Web Editor at The Takshashila Institution and tweets at (@crg_takshashila)

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