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Controlling Healthcare Costs in Japan

The Japanese story of achieving low-cost healthcare through price controls

superambulance-fuso

Japanese Superambulance/Ypy31

By Aneesh Mugulur (@mugulur)

Between 1980 and 1992, Japan’s price controls in the healthcare sector led to the decline of physician fees by 19%. In 1991, Japan’s infant mortality rate was just 0.45% of live births in comparison to the United States of America’s figure of 0.91%, placing it in the top rank amongst industrialised countries. The same year, the average life expectancy at birth was 76.13 years for males and 82.22 years for females, more than the world average.

What was the reason for such impressive status of Japan’s health?

The Japanese government provided universal healthcare to all its citizens and regulated the prices of all care (and continues to do so). The aim of this price control was to provide affordable healthcare and insulate them against the high cost of living due to inflation. In this period, more than 80% of hospitals and clinics were privately owned. However, for-profit hospitals were banned.

How did the price control mechanism work?

Health insurance was mandatory for every citizen. There were three important types of insurance based on sectors; for employees, the self-employed, pensioners and the elderly. The government also fixed the co-payment rate. Claims were supposed to be filed with providers and services were provided in kind. The Ministry of Health, Labour and Welfare provided medical care under a nationally uniform fee schedule.  It is ‘uniform’ because the same fees are paid by all insurers to providers regardless of the experience of the doctor, or whether it is performed in a rural clinic or a multi-speciality hospital. The government strictly controlled the fees scheduled, and neither the insurers nor the providers had any say on it.

While there were marginal differences in rates amongst insurance plans, the physician fee was uniform. Charging more than the prescribed fees schedule had serious repercussions. Hence, there was no incentive for higher quality of service. As a result, doctors and medical practitioners focused more on quantity rather than quality.

Was the objective of low-cost met?

Nationally, uniform fee schedule played a vital role in maintaining equity. It also established both the scope and standard of services. There are further three structural factors that ensured low costs.

  1. The economic incentive embedded in the fee schedule was for testing pharmaceutical products and laboratories test which meant it was mainly for physicians in primary care who could conduct those tests.
  2. Clinics-based physicians did not have patient admitting privileges. Only hospitals could accept patients and their fees were regulated.
  3. Low administrative costs and secure claiming process

According to the Organization for Economic Cooperation and Development (OECD), among the major industrialised nations, Japan’s personal health expenditures were the lowest.

However, there were several unintended consequences which remain unresolved even to this day. Due to the universal fees schedule, a doctor who sees more patients makes more money than a physician who performs long hours of surgery. As the price for each consultation is fixed, doctors make sure they consult more patients to increase their income. In Japan, doctors worked an average of 70.6 hours per week, compared with 51 hours per week in the U.S. Patients have to wait for three hours but their consultation time is just three minutes.

Even though Japan’s healthcare was cheaper compared to most industrialised countries, its quality was dismal. The rigid control did meet the objective of providing affordable healthcare to citizens irrespective of their income. But its unintended consequences were more.

Since Japan’s system provides more incentives to primary care physicians and pays equally to specialists, it has led to an acute shortage of specialists in tertiary care such as surgery, paediatrics, and obstetrics. According to Japan times, the number of maternity wards declined from 4200 in the year 1993 to 3000 in 2005, resulting in longer commutes for pregnant women. Another significant consequence of this government control is the increasing corruption in the system.  In 2004, the chairman of Japan Dental Association was arrested for bribing the members of the government in charge of setting medical care fees.

Will the new ‘Abenomics,’ which is making news globally, revamp the healthcare system of Japan? The question remains unanswered.

Aneesh Mugulur is an alumnus of the Takshashila GCPP15 and tweets at (@mugulur)

[This blogpost is part of an assignment of the Economic Reasoning coursework. For the assignments, students were asked to submit essays on identifying instances of price controls across the world; who the intended beneficiaries were; and what were the unintended consequences of the price control.]

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India: A vital player in South China Sea

South China Sea is one of the most difficult and contentious maritime conflicts in the Asia Pacific. Several scholars have echoed the sentiments that the South China Sea conflict would be worst case threat to peace and stability in the region. The concerns are further strengthened with China’s continued military build up, despite the 2002 Joint Declaration on the conduct of parties in the South China Sea. China’s assertive posture in the South China Sea is of great concern especially with India unfolding its Act East Asia Policy.

The Modi Government has realised the importance of the South China Sea both in terms of its geo-economic and strategic interests. To further strengthen the relationship with South East Asian countries, India pledges to be a credible  security provider. At the  2014  East Asian Summit, India along with the United States and Vietnam affirmed its support to safeguard maritime security and freedom of navigation. Further, India has been very vocal in the settling the dispute through peaceful means and in a accordance with the UNCLOS.

south china sea

Several reasons have been attributed to India’s interest in the South China Sea (SCS) (1) The increased trade with East Asia and the sense for recognition on the Sea Lanes of Communication (SLOC) from the Indian side beyond its geographical expanse and the importance of the Indo-Pacific region (2) Reducing dependency on the major powers for India’s avowed maritime needs (3) India’s fear of growing China’s assertiveness in the Indian Ocean region (4) The importance of forward maritime presence and naval partnership  is seen critical to deter India’s adversaries in the region (5) Securing the trade-transit route which passes through the South China Sea all vital to India’s growing trade, energy and security interests ( Raja C Mohan, Samudra Manthan).

As India unfolds its  maritime security posture and interest, there is a strong commitment from the Indian side to realign with several South East Asian countries. India is seen as a a vital player in the region, and Southeast Asian countries are keen to partner with India both economically and strategically. India’s inertia to expand towards to East unfolds, this is also a step to contain China’s expanding maritime interest. India’s participation in several East Asian forums is seen as a counter balance move initiated by the Southeast Asian countries. Thus India is welcomed as an external balancer along with the Untied States.

Indian Navy 2007 Doctrine defined “South China Sea as an area of strategic interest” for India and the recent Act East Asia strategy has further reiterated India’s commitment to move beyond the Indian Ocean into the South China Sea. At several occasions India stated that it could or would deploy India Navy to the South China Sea to defends its energy interests.

With India’s maritime discourse expanding and 55% of India’s trade passing through this region, it is imperative that India pursues its interest in the region. The Indo-Pacific trilateral with India, Japan and United States further revitalises India’s presence in the region. Thus the adoption of  the Indo-Pacific region into the strategic framework has cumulatively  summed up the  relevance of South China Sea for India.

Priya Suresh is a Research Scholar@Takshashila. Priya tweets @priyamanassa.

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Northeast Asia looks at India

The Geo-strategic significance of Northeast Asia dates back to the cold war  period  and continues to be relevant even in the current context. The region houses several important powers like China, Japan, the Koreas and there is a strong presence of United States in the region.

Economically vibrant region, Northeast Asia continues to attract the interest and attention of great powers. Though India is traditionally not a part of the region, today it is gaining relevance and credence an an important strategic player. This opportunity seems to be extremely critical, as the regional powers like Japan and South Korea sees India as potential player who could possibly alter the dynamics of the region.

Northeast Asia is becoming increasingly unstable with unresolved disputes and shifting alignment in the face of China’s growing presence in the region.  Though India-China relations is often seen in the light of cooperation and competition, the regional powers see India’s rise  probably as a swing in balancing China or leading to a multipolar order.

How is India seen as a vital player in Northeast Asia: 

India’s presence in the Northeast Asia is typically welcomed by South Korea, Japan and the United States. United States sees India’s presence as vital to the Northeast Asian security order. Unlike the past, US is today convinced of an expanded security role for India beyond the Indian Ocean Region. United States has made an ernest effort to conceptualise a strategic interconnection for India beyond the Indian Ocean and the Asia Pacific. A means to justify India’s role in Northeast Asia. Further United States has deliberately boosted politico-diplomatic engagement between India and the regional powers in Northeast Asia.  India has been welcomed in  the East Asian forums and institutions- probably a counter weight to China in the regionIn terms of security role, India has been involved in periodic naval exercises with the United states and Japan. The most recent has been the  Exercise conducted in Northeast Asia. Most of India’s allies in the Northeast Asia are formal and informal partners with United States. This strategic entente has brought India into the foray of partnership with Japan and South Korea.

Japan remains key to Asia Pacific, and  the recent interaction between India-Japan has strengthened the links further. The cold war politics drew India into an alignment different from that of most of the states of East Asia. and this created a sense of disjunct in terms of understanding each other.  The most complex of the India-Japan relation was the incomprehensible meaning on the  values and cultures that existed in both the countries.

However the perceived separation between the two countries are drawing to a close, the Japanese Prime Minster Shinzo Abe has called for a deeper, broader, action-oriented partnership with India. Both the Prime Ministers of Japan and India have unswervingly committed to a peaceful, open, equitable, stable and rule-based order in the Indo-Pacific region and beyond. Both the Prime Minsters have committed to an extended bilateral cooperation in spheres of security, stability and sustainable development. Several areas have been identified in terms of cooperation-people-to-people, tourism, infrastructure collaboration,civil nuclear energy and educational collaboration. Crucial areas in terms of transfer of Defence Equipment and Agreement concerning security measures for the protection of classified military information  further deepens the strategic ties between India and Japan. The participation of Japan in the India-US Malabar Exercise  has further forged the long term commitment with Japan and to deal with maritime challenges in the Indo-Pacific region.

India-South Korea relations is gaining credence in the recent years. Ideological differences through the cold war deterred the relationship between India and South Korea. But the recent “New Asia Diplomatic initiative” by South Korea and India’s “look East Asia Policy” has further elevated the relationship between the two countries.

While India and Japan have expressed concerns over North Korea’s continuous development of Nuclear weapons and have urged North Korea to comply with the international regimes. India is seen as a constructive  and viable partner in the security network in Northeast Asia. Is Japan, South Korea and Untied States subtly engaging India to contain China.

India at this juncture stands to benefit as this bilateral and multilateral engagement with North East Asia and United States is seen as a positive move towards India’s “Act East Asia Policy”.

Priya Suresh is a Research Scholar @Takshshila Institute. She tweets @priyamanassa.

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The significance of Asia’s democratic security diamond

Asia’s security is best laid out in the hands of Democratic countries that follow rule-based order, have respect for the current international order and international law.

Just days after being selected as the new Prime Minister of Japan, Shinzo Abe in his first public address stated his future for Japan and the Indo-Pacific region in general. The title of the address “Asian Democratic Security Diamond” was quite apt considering the lingering tension in the region.

This piece focuses on strengthening Japan’s relation with democratic forces in Asia namely India, Australia, United States of America and Japan itself. The principle argument of this is that Asia’s security is best laid out in the hands of Democratic countries that follow rule-based order, have respect for the current international order and international law. After Japan’s recent skirmishes with China over a small set of islands in the East China Sea, Japan has become wary of China’s growing disrespect for international law and order and the current status quo. Japan wants the democratic countries to come together and counter China over such misappropriated claims.

In a carefully planned address Shinzo Abe stated “The ongoing disputes in the East China Sea and the South China Sea mean that Japan’s top foreign-policy priority must be to expand the country’s strategic horizons. Japan is a mature maritime democracy, and its choice of close partners should reflect that fact. I envisage a strategy whereby Australia, India, Japan, and the US state of Hawaii form a diamond to safeguard the maritime commons stretching from the Indian Ocean region to the western Pacific. I am prepared to invest, to the greatest possible extent, Japan’s capabilities in this security diamond.”

Japan’s struggle against a growing and increasingly assertive China will be at the forefront of a new rivalry between the West and China. Even though Chinese Leaders repeatedly convey that China’s rise will be peaceful and not cause harm to anyone, analysts believe that China is going the way of Germany before World War I and II. Japanese repeatedly point out that China is making the same mistake that Japan made during World War II. Prime Minister Shinzo Abe went as far as to compare the recent tension between the two countries to the one existing between Great Britain and Germany prior to World War I at the recently concluded Davos Summit in Switzerland.

Japan is positioning itself to defend its interests in Asia. Japan has been largely dormant since World War II, concentrating mainly on its economy and has been a model US ally in the region. Japan is becoming increasingly fearful that South China Sea is becoming “Lake Beijing” and it will surely harm its economy and its very existence in the future. If implemented, Abe’s policies will inject Japan into the heart of the intensifying Pacific struggle between Beijing and Washington for maritime regional maritime dominance and stir new concerns, especially in China, over a possible reemergence of Japan’s militaristic past.

Japan is increasingly courting countries such as India and Australia with huge interest in the Indo-Pacific region to ward off the China threat. Joint Maritime exercises with these Countries have become a calendar marker each year. The Malabar Exercise between India, United States, Japan, Australia and Singapore have seen strong diplomatic response from China which sees such exercise being directed against it.

Australia issued a strong response in support of Japan when China declared an expanded ADIZ covering the Senkaku Islands in the East China Sea. Even Kevin Rudd, Former Australian Prime Minister and a sinologist suggested that rise of China as a singular naval power in the region will harm the interest of all the countries in the region and said that it will be the policy of successive Australian governments to see to it that Australia, along with The United States and Japan try to strive to prevent such a future.

India on the other hand is watching these developments very closely and approaching the situation very cautiously. Even though India did not issue a official statement condemning China’s ADIZ, many believe that Japan will have the support of India in any future conflict. India too is fearful that China is not expanding only into the Pacific but also its own backyard, the Indian Ocean. There have been cases of skirmishes and stand-offs between the Indian Navy and its Chinese Counterpart in the area. The inductance of INS Arihant and other ships such as Aircraft Carrier and Frigates are a step in the right direction to achieve its Blue Water Naval ambitions and to counter China’s formidable navy.

The United States with its 6 Carrier Groups in the Indo-Pacific region is keeping a check on China’s naval ambitions. Joint Naval exercises with Countries in the periphery of China and at times, at the receiving end of China’s gun-boat diplomacy are being assured of all financial help to perk up their own capabilities to counter China. US has time and again empathised on the role of regional organisations to sort out disputes between the concerned countries. The role of United States is critical and extremely crucial in maintaining order in the region. However many countries are concerned to what extent the United States will go to safeguard the territorial integrity of its allies in the region especially after last year’s Scarborough Shoal, where after US intervention, China backed off but within a month again occupied the islands and with very little response or retaliation by the United States.

Japan’s emphasis on “open and stable seas” and maritime security is the taking point in the policy circles and to what extent the Democratic Security Diamond initiative is able to ward off the China threat remains to be seen. One thing is guaranteed that Shinzo Abe will go down in history  as the one man who stood up against the China threat well before anyone else.

Piyush Singh is a law student with an interest in India-China relations and nuclear law and energy. He completed his internship at the Takshashila Institution.

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“Chinese dream”- return to the concept of Middle Kingdom?

By Piyush Singh

China wants to be the sole regional power in the Asian region and is clearly projecting the same, militarily and through its economic clout.

The recent declaration of Air Defense Identification Zone (ADIZ) by China over Senkaku/Diaoyu Islands was a reminder by the Chinese government to the world of its growing role as a regional power and in future a ‘superpower’. Over the course of last year after President Xi Jinping took helm as the leader of the country, Chinese assertiveness has increased in the Asia-Pacific region. It has proactively started claiming the whole of South China Sea and Diaoyu islands in the East China Sea. The Chinese government has already declared these zones as its “Core Interests”, putting it at the same stature as the issue of Taiwan, Tibet and Xinjiang. Its Boundary dispute with India is one of a more complex nature and in the past one year there have been more than 300 instances of incursions by the Chinese troops and occupying Indian Territory.

President Xi Jinping’s Speech about the great Chinese Dream was focused on “rejuvenation of the Chinese nation” and “combines the spirit of the nation with patriotism as its core”. Skeptics around the world have linked the nature of this so called “Chinese Dream” to a more military form of dream. China’s increasing assertiveness in South and East China Sea has created ripples in various countries. President Xi’s interpretation of the Chinese Dream as a strong nation for the Chinese people and a strong military dream for the military has further more alarmed the neighbouring countries, in particular Japan, India and Vietnam. This is a stark difference from President Hu Jinatao’s “Peaceful Rise” concept whereby he emphasised on the peaceful development of the “Chinese nation”. After assuming power President Xi has issued orders to focus on “real combat” and “fighting and winning wars”.  China’s official defence budget has increased 10.7 percent from 2012 to 117 Billion Dollars.Unofficial Spending is estimated to be much higher, around 150 Billion Dollars.

What Is the Dream About? However, the main concept behind President Xi’s Concept of “Chinese Dream” is to restore China to its former glory of more than 5000 years of proud civilisation which it had lost after more than 200 years of foreign rule and oppression starting in 1750’s through Opium Wars and ultimately Japanese Occupation culminating into World war II. His dream is directly related to the old Confucian concept of the “Middle Kingdom” whereby China was at the centre of the world affairs and different countries paid homage to it. China no longer needs to “bide its time and hide its capabilities” as propounded by the great reformer Deng Xiaoping. For President Xi, the time for the Chinese nation to reclaim its former glory has come. He has even outlined the year 2049 as the time when the Country would have truly arrived at the world stage, which is on the 100th anniversary of the Communist Party of China. Even though many argue that the so called “Chinese Dream“ is for the development of the Chinese people and to achieve economic growth, reduce poverty etc drawing parallels with “American Dream” of economic prosperity, liberty and basic human rights they clearly forget that China has always been a very opaque society in terms of its functioning and decision making. Who calls the shots in China has always been disputed. Many argue that the military has a firm control over the politburo and largely influences its decision making process.

Indian and Japanese Concerns-Time for Strategic Partnership? The other two aspiring regional powers in the Asian region, India and Japan have clearly taken the proactive Chinese military Posture with a pinch of salt. India in response to repeated Chinese incursions has raised a new mountain corps division of near about 85,000 soldiers and is simultaneously strengthening its fledging navy to maintain its dominance over the Indian Ocean region and also to secure its economic interests in the South China Sea. Japan has for the first time in ten years increased its defence budget and aims to spend around US$239 Billion over the course of next five years on buying up military hardware to counter China. Since assuming office, prime minister Shinzo Abe has vowed to protect the territorial integrity and sovereignty of Japan. The Japanese Self Defense Forces(SDF) have been rapidly undergoing modernisation drive and it is being widely assumed in policy circles that it will soon lose its “pacifist” tag forced upon it after the horrors of World War II.

Both India and Japan share common concerns regarding the rise of China and how it is going to impact the regional balance in Asia and its periphery. The recent visit of the Japanese Emperor Akihito and Empress Michiko signify the importance the Japanese give to India-Japan Relations. Both India and Japan in recent years have increased defence cooperation and financial engagements. Abe’s government has also vowed to review Japan’s ban on weapons exports and is aggressively pursuing options of arming the militaries of India and Vietnam. Even the United States of America, the sole super-power after the end of Cold War has started prioritising itself in Asia-Pacific with its “Asia Pivot” program whereby it seeks to limit China’s growth as a super power and keep it mingled on the Chinese Mainland through repeated poking at its dismal Human Rights record, environment pollution and more rights for its citizens. Many analysts have linked this concept of “Chinese Dream” to the USA’s “Monroe Doctrine” which it adopted in the early 19th Century whereby it restricted the meddling of European powers in the Americas. China wants to be the sole regional power in the Asian region and is clearly projecting the same, militarily and through its economic clout.  The best way to contain China is to engage it more in international issue through the rule of law and not arbitrarily through its own set of rules.

Piyush Singh is a law student with an interest in India-China Relations, Nuclear Law and Energy. He is completing his internship with the Takshashila Institution. 

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India’s options for reducing risk from China-Pak alliance

R.Srikanth

While the internal debate has predictably settled down on questioning the morality of executions in a democratic republic, few questions have been asked about whether Kasab’s execution has increased or decreased India’s options with respect to its long-term adversaries in the region, China and Pakistan.

Hafiz Saeed, leader of terrorist group Lashkar-e-Toiba is being legitimised in the public space in Pakistan, as he makes a foray into Pakistani politics. Given Pakistan’s penchant for denying its hand in anti-India terrorism, it seems like poor strategy to execute Kasab at this time, as he is the only living being that was proof of 26/11. Can Indians afford to be sanguine about the mainstreaming of terrorist groups in Pakistani politics?

The central place of religion in politics is not surprising given that Pakistani Constitution and Republic and even the Army define themselves in terms of religious doctrine. The side effect of religious propaganda in the Pakistani school curriculum over the decades has resulted in religious fundamentalist groups garnering immense public support for right wing political groups. In this environment, terrorist masterminds like Hafiz Saeed are able to seek legitimacy by entering politics and making pretensions of abstaining from terrorism.  Hafiz’s actions of offering prayers for a 26/11 terrorist, but not its victims, says enough about his pretensions of seeking a life of peace.

It does not seem to be in India’s interest to let Pakistan get away with providing validity to groups like Hafiz Saeed’s Lashkar-e-Toiba as a legitimate political party via an election. This will result in the permanent mainstreaming of terrorist groups into Pakistani politics. However, in Pakistan, it is a truism that no matter which political party wins, the Army actually is in control. So, in that sense, not much has changed in Pakistani politics, except for the death of secular and liberal political parties. Frequent headlines in the international print media that portray the Army submitting to the civilian government of the day have always turned out to be false.

Even mainstream political parties such as the PTI and Jamaat-e-Islami are very vocal about their aggressive intent towards India, should they come to power. All these political parties have openly stated their antipathy for friendly relations with India, with constant background refrain of promising more terrorism in India unless India relinquishes Indian territory in Jammy &Kashmir to Pakistan.

Buckling down to Pakistan’s blackmailing tactics to exchange land for peace, whether in Siachen or elsewhere, are unlikely to yield results for India. This is mainly due to the Pakistani Military-Jihad Complex’s (MJC) antipathy to normalising relations with India, combined with their domineering role in Pakistani politics. Since the inception of Pakistan as a state in 1947, the Pakistani Army has always dictated terms to the civilian government in power.

In the early 80s and 90s, Pakistan was financially, politically, and diplomatically supported by the USA, China, Japan, and Saudi Arabia. Such support has waned in the recent years due to frictions between Pakistan and its donors. USA continues to finance Pakistan under strict controls and has downgraded military relations with Pakistan. Saudi Arabia still wields a lot of influence in Pakistan, though it has stopped subsidising Pakistan like it did in the past.

The only country that has made proclamations of everlasting, mutual, enduring relations with Pakistan is China.  This was evident from the fact only a journalist from Pakistan was given the privilege of being allowed to record the proceedings of the CPC. Ignoring the dubious value of the Pakistani presence in such a meeting- the showcasing of China-Pakistan relations- is a reminder that the chance of these two Indian adversaries colluding against India in the long term is a certainty. As long as the MJC wields power in Pakistan and the Communist Party wields power in Beijing, India needs to consider the likelihood of such collusion, a certainty.

Although China’s investments in Pakistan have decreased in scope and involvement over the last couple of decades, not least to the inability of the Pakistani government to secure the lives of Chinese engineers and workers implementing development projects in Pakistan. However, China has followed a strategy of proliferating weapons of mass destruction to states like North Korea and Pakistan, and there is no indication that the CCP has relinquished the use of WMD proliferation as a tool in the toolkit of Chinese foreign policy.

This is where China and Pakistan gain from their illegal occupation of Indian territory in J&K. Pakistani occupation of PoK and China’s occupation of CoK, has resulted in a physical border and land route connecting China and Pakistan. As long as this land route connects China and Pakistan, China’s capability to proliferate weapons of mass destruction to Pakistan via such a route remains in place. Proliferating such weapons by Air or Sea is a lot harder as the global commons is monitored. Thus, it is in India’s long-term interests to ensure that Chinese capability for such proliferation is neutered. Once a capability is neutered, China’s intentions towards India in that region do not matter if India regains control over all of J&K. Intentions of any geopolitical entitiy can change on a whim with no effort, but geopolitical capability needs to be gained and maintained.

Why is the completion of the accession of J&K to India necessary? Why does Indian government spend an enormous amount of revenue generated from other Indian states to sustain J&K? For one, there is a parliamentary resolution in effect today that declares India’s sovereignty over all of Jammu & Kashmir.  India retaining control would mean that India would have a border with Afghanishtan, establishing direct Indian transit into Central Asia. India has been denied land transit rights into Afghanistan and will continue to be denied such rights for the foreseeable future. Also, as explained earlier, such reclamation of control over J&K would ensure breaking a land route between two of India’s most bloody-minded and hostile adversaries, China and Pakistan. Seems prudent for India to proactively gain leverage over them in order to control events in the future that may be orchestrated by the collusion of these two hostile nations.  It should be noted that a political union of the two sides of the LoC in J&K is a logical first step towards Indian control over all of J&K.

What are India’s options with respect to Pakistan, especially given China’s significant capabilties today, to change the nature of India-Pakistan relations via WMD proliferation? India taking the initiative on foisting aggression on Pakistan is not an option, as this is exactly what the Pakistani MJC has been trying to do for a long time. Recall the 26/11 was orchestrated when the Pakistani Army was trying to prove to its American allies that maintaining a large army presence in the Indo-Pak border is essential, in order to avoid going after the Taliban in North West Pakistan.  The Army’s gambit would have worked had the Indian government reacted to 26/11 by escalating hostile intentions, thereby providing the Pakistani Army with a solid excuse to not cooperate in Waziristan.

If India escalates the situation on the ground, Pakistani army’s best option is to respond by claiming that various red lines have been crossed. Once this is done, what will follow is a drumbeat of “India-Pak nuclear flashpoint” from motivated third parties, mostly arms-control wonks. Such a falling out of events has never worked in India’s favor in the past. A more important reason to avoid a war with Pakistan is the effect it will have on the gap between India and China in terms of economic and military power. The already wide gap is likely to increase further, which is unwise given that there is no guarantee India can recover from such a setback post war with Pakistan. However, even if overt war is ruled out with Pakistan, the sub-conventional proxy war options that Pakistan avails is also available to India- it is a different matter that Indian political leadership seems to have failed to avail itself of such options.

Let us take a look at Pakistan today. Pakistan government’s choice to radicalise their population with religious dogma, hatred and violence in school textbooks has created multiple generations of Pakistanis that would fit the label of religious radicals or fundamentalists- people who are not averse to using violent means as a tool to further their religious-political goals. The end result seems to be that Pakistanis are increasingly vulnerable to terrorist bombings in their own country, and State of Pakistan is increasingly unable to exert control over its own territories.  This should seemingly increase India’s options, but it has not done so yet.

The Pakistani government effectively controls 3 out of 4 states in the country. The army dare not challenge militant tribes in the Northwest Frontier province that challenge the Pakistani army on the ground. Any election in Pakistan is likely to usher in a religious-minded political party in power- these parties have openly stated their concurrence with the goals of Al Qaeda in Pakistan. If such a religious party comes to power as a result of elections in Pakistan, it will legitimise anti-India terrorist groups in Pakistan, which means an increase in anti-India violence emanating from Pakistan, as it has happened in the past. When dealing with Pakistani MJC/Government it is prudent to watch what they are doing rather than what they are saying, as explained by Mr Vikram Sood.

If suggestions that Saltoro/Siachen be transformed into a “Peace Park” are taken seriously by the Indian government, then it would imply that the Indian Government has learnt no lessons from the Kargil War or has forgotten those lessons already.

R. Srikanth is a Senior Researcher at the Cyber-Strategy Studies Team at the Takshashila Institution and a GCPP alumnus.
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Farmers Suicide in West Bengal

Aditya Dash

Around 25 shrimp farmers committed suicide in West Bengal.

They did not end their lives due to a drought or other calamities leading to the destruction of their crops. Their calamity was that there was no one to sell to and the market price for shrimps had crashed. Most others are currently selling at 30 percent below their cost of production.

The reason for this market outcome is that there has been an increase in global supply compared to last year while the global demand has decreased. Last  year, global supplies were hit by various calamities such as floods in Thailand and Vietnam and disease outbreaks in Vietnam and Indonesia. This was the main reason why a lot of shrimp farmers in India made extra money, as more shrimp was sourced from India. This year, no such disaster occurred in any major shrimp producing area and hence there has been a steady increase in the supply of shrimp. As far as the demand is concerned, most developed markets have high inventories from last year so the demand has been fairly low possibly due to the global economic slowdown.

For West Bengal things have been particularly bad. Majority of the produce is meant for export and specifically to Japan. Shrimp processors in West Bengal did not think about hedging their exposure to a single country of origin. Some of you might have read about the rejection of Indian origin shrimps in Japan due to the presence of Ethoxyquin. Ethoxyquin apart from being an unappealing term to be found in a food item is a food preservative used as an anti-oxidant in fish meal and fish feed to prevent rancidity. We feel that this year the detection of Ethoxyquin might have been due to the usage of imported shrimp feed of Malayasian and/or Vietnam origin. What is curious about the Japanese regulations is that the tolerance level of Ethoxyquin for shrimp is 0.01 PPM while the tolerance level for fish is 1 PPM. So as per Japanese regulations, it is acceptable for fish to have 100 times the amount of Ethoxyquin as shrimp. All the containers that have been detained in Japan are in compliance with WHO’s CODEX standards.

Although shrimp is not an integral part of the Indian diet, at such low prices clearly an arbitrage opportunity exists. However arbitrageurs will be constrained by the availability of cold chain infrastructure. Most shrimp processors have already bought plenty of raw materials and have no space left. Maybe things would have been better if there was 100 percent FDI in retail. Walmart and other similar entities would have leaped at this opportunity and stocked up on frozen shrimp.

Apart from the demand constraints one should also focus on the West Bengal shrimp farmer. Their cost of production is higher compared to the farmers of Odisha and Andhra Pradesh. The primary reason for that is the lack of awareness and education amongst the farmers. They tend to indiscriminately use Probiotics and other chemicals for maintaining adequate water conditions. Feed is given in a non-scientific manner which leads to higher Feed Conversion Ratios (amount of feed required for 1Kg of growth). Part of the blame lies on feed and shrimp farming input manufacturers and their marketing tactics. We have mostly illiterate and ignorant farmers operating in a highly technical field without any knowledge about quality parameters and basic economics. State governments should invest in translating and disseminating freely available technical information amongst the farming community. Steps should also be taken so that technical knowledge could be imparted at the matriculate level. West Bengal’s infrastructure is not as good as Andhra Pradesh, which has produced a record high number this year. Better road connectivity combined with regular electricity supply would drastically reduce their cost of production and improve product quality too. Conditions in Andhra Pradesh and Odisha are not very good either, however since the cost of production was highest at West Bengal the first round of suicides took place there. Although the financial strain will be felt by Odisha and Andhra cultivators, due to their lower cost of production things should not get that desperate.

Maybe the trade diplomacy team of the Indian government will resolve this matter as soon as possible. Maybe a screening of Ikuru to Japanese health authorities might awaken them to rationalise such a norm which has had such far reaching consequences. In Ikuru a lifelong bureaucrat comes to know that he has a year to live and tries to give his life a sense of purpose. He does so by taking responsibility of a project to transform a malarial swamp into a children’s’ playground. A senior bureaucrat once explained to me that the following are given importance in descending order cereals, horticulture, diary, animal husbandry, poultry and finally aquaculture.

While the suicides have been tragic, a silver line amongst such dark clouds is that aquaculture might get some more attention from the government.

Aditya Dash is a shrimp exporter.

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