Tag Archives | East Asia

Exploring Mongolia’s balancing behaviour

In the near future, it’s unlikely that Mongolia will position itself as one of the allies in India’s efforts to balance out Chinese influence | by Pranay Kotasthane (@pranaykotas)

Mongolia’s supposed volte-face has attracted the attention of India’s strategic community in the last few days. A simplified sequence of events is as follows: In May 2015, Mr Modi made a trip to Mongolia, the first ever by an Indian Prime Minister to that country. The most substantial outcome for Mongolia from this visit was the announcement of a $1 billion line of credit. Notably, the $1 billion amount is the second largest credit line issued by the Government of India, since the inception of this assistance programme in 2003-04. This was followed the Dalai Lama’s ninth visit to Mongolia in November 2016 (the last planned visit in August 2014 was cancelled by Mongolian authorities because President Xi was to set foot there on the same dates). China unsurprisingly objected to the November visit: it closed down a key border crossing between the two countries and cut-off talks on providing a $4.2 billion debt to Mongolia. Soon enough, the Mongolian Foreign Minister was made to publicly apologise for permitting the visit. He went on to say that the Dalai Lama will not be allowed to visit Mongolia under the current administration henceforth.

China’s official response to the events was sullen — an approach that has come to characterise its relations with most of its neighbours. The Chinese Foreign Affairs Spokesperson said:

we hope that Mongolia will truly learn lessons from this incident, truly respect the core interests of China, honour its promise and make efforts to improve the relations between China and Mongolia.” In turn, the Mongolian ambassador to India on called on India to extend support in this moment of crisis.

Now, because of the India angle to this story, some analysts pointed out that India’s inability in extending sufficient help was to blame Mongolia’s spectacular capitulation. Accurate or not, this assessment leads us to the following questions: what does this turnaround say about Mongolia’s capacity to challenge China? And, can Mongolia ever demonstrate balancing behaviour and ally with states such as India in countering China? On examining the recent turn of events closely, two possibilities come forth.

The first possibility: it was Mongolia that initially sensed an opportunity — a visit by the Dalai Lama could signal that his reincarnation could appear in Mongolia. Hence, the Mongolian government permitted the visit, albeit one strictly classified as that of a ‘religious nature’ alone. But when the Chinese stick came down with all its might, Mongolia quickly retracted.

Mongolia has played this game before — this was the Dalai Lama’s ninth visit to the country since 1979 and on each occasion, the Chinese response has been unkind. In 2002, China retaliated by closing the border rail crossing for two days, isolating the land-locked country further. The response in 2011 was milder — a ‘stern representation’ was made to convey Beijing’s displeasure at Ulan Bator. With this history in mind, it is difficult to believe that Mongolia permitted the trip without expecting a pushback from China.

The second possibility: India was, either a failsafe option that Mongolia presumed it could revert to in case the Chinese retaliated, or was the one that abetted the Dalai Lama’s visit. In either case, this possibility relies on a perception that Mongolia can be a balancing power — ready to join hands with weaker sides such as India to challenge the regional hegemon.

If this was indeed the intent from the Indian side, we’re on the right track. However, the same cannot be said about the instrument used. It would take a lot more than a mere increase in Line of Credit (LoC) to get a land-locked country — one that is struggling with a ‘$1 billion budget gap and looming debt repayments’ — on your side. A Line of Credit — whatever the amount extended may be — count merely as an attempt that can at best marginally change incentives of the recipient country. Projects undertaken as part of LoCs come with riders — 75% of the value of the contracts must be sourced from India. And the utilisation rates of LoCs are often slow, because of supply side constraints (read incompetence of Indian exporters) or because of demand issues (read inadequacies of recipient nation’s importers). [Data on lines of credit available in this xls sheet from the EXIM bank website.] 

Probably, the truth lies somewhere in between both the possibilities. What is clear is that China’s response this time around was swift and unforgiving, in continuance of China’s aggressive stance against its neighbours under President Xi. And it came at a time when Mongolia is already struggling economically. Under such circumstances, can Mongolia be one of the allies in India’s project of balancing out Chinese influence in the near future? Can, for instance, Mongolia take the risk of allowing the next reincarnation of the Dalai Lama to appear in Mongolia?

Very unlikely, especially if India is unwilling to think beyond Lines of Credit. If India is seriously considering challenging China, that demands it to offer something that can drastically change its partners’ incentives. Perhaps it is time to consider options such as offering unconditional development (if not military aid), or investing in long term developmental projects (like CPEC, minus all the Chinese characteristics) to bolster the capacities of smaller states in China’s neighbourhood. And even that wouldn’t guarantee the balancing credentials of states such as Mongolia, too low on the national power scale to inflict pain to China. Perhaps, a better balancing strategy for India would be to consolidate relations with Vietnam — a country that has the credentials to take the fight to the Chinese in alliance with partners such as India.

Also read: my piece on how India’s Lines of Credit stack up.

Pranay Kotasthane is a Research Fellow at The Takshashila Institution. He is on twitter @pranaykotas

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Changing alignments in East Asia

by Pranay Kotasthane (@pranaykotas)
Early indications about a Trump Presidency’s impact on partnerships in East Asia

Since Woodrow Wilson, the goal of American foreign policy has been to prevent regional hegemony.

believes Seth Cropsey, Director of the Centre for American Seapower at Hudson Institute. Assuming this was true, the goal is now being reconsidered seriously in the wake of Donald Trump’s victory in the presidential elections. All through the election season, Trump has indicated that the next administration would be more inward-looking — provision of the common good of security, and promotion of free trade, will not be the guiding principles of US foreign policy anymore.

In the early days, the effects of this new strategy are most clearly visible in East Asia. After Obama decided to suspend efforts to pass his signature Trans-Pacific Partnership (TPP) deal through the Congress, Vietnam too will not ratify the deal in the national assembly anytime soon. Trump’s victory also caused panic in South Korea’s financial markets, prompting an emergency meeting of the National Security Council. Australia too followed suit — signalling support for Chinese-led Free Trade Area of the Asia-Pacific.

The framework below gives an idea of how East Asian states are recalibrating their strategies over the past few weeks.

tpp-trump-duterte

Given that the US and China are overwhelmingly powerful in the region, bipolarity exists in East Asia. Further, there are two axes of alignments — political and economic. Based on their relationships with these two major powers, East Asian states can be assigned to one of the four quadrants. There are two bandwagon quadrants (where a state aligns with US or China both, politically and economically) and two hedging quadrants (where a state aligns with one major power in political engagements and aligns with the other in economic arrangements). Grey points indicate positions of East Asian states before Trump’s presidency and black points indicate recent shifts. I haven’t classified all the East Asian states in this framework, yet.

This framework indicates that countries like Australia and Philippines are already moving towards the hedging quadrants. With TPP faltering, a lot of states might follow the Australian trajectory —  economic alignment with China and play a waiting game on geopolitical alignment.

Countries such as North Korea and Japan will find the realignment tougher, and will look out for more options. Faster movement on India—Japan cooperation is an example. No surprises that a landmark nuclear deal between the two countries took place once it was clear that Trump would be the next US president.

Interesting days ahead for East Asia watchers. China can be expected to be strident in the days to come.

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

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Why is India unable to ‘swing’?

India’s portfolio of capabilities to deliver pain to China (and the US) is not sufficiently developed, constraining India’s ability to swing between US and China.

by Pranay Kotasthane (@pranaykotas)

The Nuclear Suppliers Group (NSG) meeting in Seoul ended without a decision on India’s membership application, despite India’s energetic diplomatic push. In the end, China managed to get India’s membership bid blocked. Following this, the Indian geostrategic community has been trying to ascertain the motive that led China to oppose India’s entry into NSG.

Broadly, there are two lines of thought to explicate China’s opposition. The first argument goes as follows: China’s opposition is a result of the larger US—China powerplay. China wants to prevent an important partner of the US from growing in stature in global forums and hence it opposed India’s NSG membership. WPS Sidhu argued this point of view as follows:

In reality, it [India’s membership] is a contestation between the US and China to determine the future of the nuclear and world order. China’s public declaration to oppose New Delhi’s formal NSG application is more about keeping India out rather than bringing its “all-weather friend” Pakistan (which belatedly also put in an application) in; it is more about securing the existing nuclear and world order rather than strengthening the non-proliferation regime; and, above all, it is a blatant challenge to Washington’s leadership in shaping the evolving world order.

The implication, if this viewpoint holds true, is that any attempt by India to build closer ties with the US will lead to Chinese opposition for India’s membership in multilateral organisations that have the US as the fulcrum. The view also assumes that China will view India more favourably as India grows without coming in the way of China’s geopolitical ambitions.

The second line of thought argues that China’s opposition is consistent with China’s long-held strategy of containing India. Rajesh Rajagopalan, explains this point of view, as follows:

China’s strategy has been consistent since the 1960s and its sole objective was the containment of India. China containment strategy shows little correlation with the state of US-India relations. China transferred nuclear weapons technology to Pakistan in the 1980s, not exactly a period of close US-India ties. It transferred missiles to Pakistan in the 1990s at a time when India had lost its Soviet ally and its relations with the US were still tense. India’s increasing closeness to the US is the result of New Delhi’s reluctant recognition of China’s containment strategy against India, not its cause.

The implication here is that China will oppose India’s growth as a regional and global actor, regardless of India’s equation with the US. Thus, China will not only oppose India’s membership in multilateral organisations where the US has played a powerful role but will also undermine India’s role in Chinese led initiatives such as OBOR, SCO and BRICS.

Both lines of thought concur that China is determined to pose challenges to India’s rise.  This, despite the fact that India has tried to advance its relationships with both China and the US. Essentially, India has tried to project itself as a swing power —a factor that can tilt the equation in favour of any major power which has India on its side. It is with this objective that India is eager to be a part of every global governance forum led by China, even though India’s national interests clash the least with that of the US.

But if China’s actions are an indicator, it appears as though this strategy of ‘swing’ doesn’t seem to be working. Why is that so? A successful “swing” is the one where a state can demonstrate that it can deliver pain for one and pleasure for the other with equal effectiveness. And here in lies India’s problem — our portfolio of capabilities and stated intentions that can deliver pain to China and the US is not sufficiently developed. While India has amply demonstrated that it can be supportive to both Chinese and US multilateral campaigns, there is no articulation of how costly it can be to ignore India.

Let’s look at the current pain deliverance portfolio of India. In what way can it objectively hurt China?

The first option is to amp-up India’s involvement in China’s neighbourhood. Rajesh Rajagopalan explains India’s involvement in East Asia as follows:

India can imitate what China is doing with Pakistan: build up the military capabilities of others on China’s periphery who share India’s worry about China. They may be too weak to match China, but enhancing their capabilities is one way of forcing China to divert its energies and make it understand the costs of strategic blowback. This can take the form of military assistance as well as training and other forms of cooperation.

ASEAN is also divided on the issue of tackling China. States such as Philippines and Vietnam have longstanding conflicts with China. While they are likely to be more vocal against Chinese hegemony, others in ASEAN will bandwagon with China. The next event that will see tempers rising in the region is the upcoming verdict by the Permanent Court of Arbitration (PCA) on the issue of sovereignty over two island groups claimed by both China and Philippines. In all likelihood, this verdict will not go entirely in favour of either nation; PCA will settle for a mix of equidistance and equitable principles just like it did in the case of India—Bangladesh maritime dispute. Back then, India displayed exemplary maturity in accepting the PCA verdict. India can start projecting its own success story before the verdict comes out in the next couple of weeks. Going ahead, India can prioritise its relationship with the ASEAN nations that are likely to challenge China.

Second, India can look at global Chinese initiatives such as Belt & Road (OBOR) from the dual lens of competition and complementation: in the Indian sub-continent, OBOR should be looked at as an aggressive competitor, using it as an excuse to accelerate India’s own projects of connecting markets in India’s own neighbourhood. Outside the Indian sub-continent, India can look at complementing OBOR. For instance, in East Africa, India can work with China under the aegis of “Many Belts Many Roads” to expand its own reach.

Third, India can make its presence felt in BRICS and SCO by taking a strong stand against Chinese hegemony. Quitting these groups at an appropriate juncture can be used to make a point.

These are the three pain deliverance measures that India can implement at its current levels of power. Beyond them, there is little that India can do unless it gets its house in order with a view towards a substantial rise in India’s power in all dimensions — economic, military, maritime and political.

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

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India’s Pacific Ambition

In many ways India is not a traditional or a significant power in the Asia Pacific region, but today India is making a concerted effort to look eastwards. There is a divided opinion on India’s Pacific ambition, while some call it as an emerging aspiration, while others call it as a deficit action. However it would be a misnomer and premature to  decipher  India’s  geo-strategic and geo-economic interest as simply void. With US strategic pivot in East Asia, and with expanded US-Japan alliance system, India is drawn into this  power configuration partnership, probably an effort to counterweight  China.

 

India and east asia

There is a growing geo-strategic and geo-economic involvement of India in the region. Host of factors ranging from past history, economy, political and strategic has dominated India’s East and South East Asia dynamics.  Trying to connect the demands of the  post liberalisation era and to engage meaningfully in the region, India re-visited its Look East Policy. India’s engagement with ASEAN is yet another milestone of integrating into the global economy.

The United States as a part of its pivot strategy in Asia , is harnessing  India as an important player in the region.  This has resulted in India’s invitation for the East Asia Summit in 2005. There is a sense of  inclusion of India by Singapore, Indonesia, Thailand, Japan and South Korea despite China’s objection. Defence diplomacy is something that India is judiciously following and has conducted  joint naval exercises with South Korea. Thereafter there has been an greater political engagement with Seoul. There is a special strategic global partnership that is emerging between India and Japan,as both the countries remain very watchful of China.

There are several areas that India-Japan are networking together. The high speed railways between Ahmadabad and Mumbai is a very important initiative towards this effort. The cooperation on nuclear and defence between Japan and India is very significant imperative in Asia’s landscape. There is a crystallisation of trilateral partnership between India-Japan-United States. Maintaining Balance of Power  is extremely vital and the resultant factor is the changing countours in the strategic landscape of East Asia.The triangular relation is seen as a crucial geo-strategic alternative which could probably balance China.

Is the inclusion of India done on the pretext of a growing economy or as an intent to contain China.There is lot of uncertainty that prevails in the region, what is the position of Japan, China and United States over the future of East Asia. Can the emerging powers like India, Japan and Australia fit into the strategic gap as  a stabilising force in the region. There is an emerging power shift that is slowly unfolding , can India benefit from this strategic quadrangle is something that has to be carefully watched.

Priya Suresh is a Research Scholar with the Takshashila Institute. She tweets @priyamanassa.

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