China

What does India get out of its membership in AIIB?

The 71st UNESCAP Commission session held in Bangkok, Thailand earlier in 2015, was attended and addressed by India’s Minister of Commerce and Industry, Mrs. Nirmala Sitharaman. She boldly declared, in order to close the crucial gaps in infrastructure, that India would require an approximate US$ 1 Trillion. India would need that massive investment in “the next few years” and would require “innovative solutions,” she continued. Fast-forwarding to January 2016, India was elected to a seat on the Board of Directors of the China-led Asian Infrastructure Investment Bank (AIIB). The bank is constructed with the mission to “jointly address the daunting infrastructure needs in Asia.” India, part of this venture as the second largest shareholder, committing around US$ 8 Billion is not merely a convenient coincidence but a concerted effort to become a significant player in the shifting world order.

 

Just by its mere membership and the difficult-to-overlook massive contribution, India is now inextricably at a point of advantage in accomplishing three goals. One, building its own infrastructure being the most obvious. Two, shifting to a more global role in a more tangible way, that is part of a continued active foreign policy of the Indian PM, Mr. Narendra Modi. Lastly, AIIB is the common ground on which India can carefully sustain and build on its recent improvement in relations with China.

 

According to the World Economic Forum’s Global Competitiveness Index, India’s infrastructure score has actually worsened over the last year. From the 2014-15 report, India now ranks 87th out of 144 countries. Indian Finance Minister, Mr. Arun Jaitley, has also mentioned the government’s push for a 9% growth in 2016. However, even to sustain the current 7.3% GDP growth, India needs to quickly and efficiently invest in and develop its infrastructure. Bloomberg reported that India will have to finance infrastructure projects based on loans. While it is attempting to approve major projects (roads, ports, power etc), expecting further interest rate cuts, and establishing “a fund to spur infrastructure lending and permitting dedicated tax-free bonds,” India’s expected debt is to reach $750 billion by 2017. Hence, India’s $ 8 Billion contribution will become the quid pro quo of a promise of increased investment for its own domestic growth agenda.

 

Secondly, looking beyond to the requirements of Asian nations, India will play an active role as a regional and global leader, which compliments Mr. Modi’s foreign policy since the beginning of his term in 2014. Asia’s infrastructural gaps are not very different from India’s own gaps. The 2010-2020 estimate for Asia’s needs are totalling up to $8 Trillion. Countries like the Philippines, Vietnam, and Thailand are transforming quickly and have multiple infrastructure projects that are just a fraction ot the overall need. A report by the Asian Development Bank (ADB), quoted by Forbes mentioned that --

 

“developing Asian countries have an infrastructure demand of about $8 trillion over the ten years to 2020, including $2.5 trillion for roads and railroads, $4.1 trillion for power plants and transmission, and $1.1 trillion for telecommunications, and $0.4 trillion for water and sanitation investments.”

 

India is ready to lend its support to close that gap within the region and in turn is actualizing its leadership in Asian affairs. Becoming a key player in AIIB incontrovertibly places India in a position of strength and by pairing up with China, it is leading the shift of the economic order of the 21st century to Asia. AIIB, with $100 Billion in seed money, is in direct competition with other International financial organizations like ADB, International Monetary Fund (IMF), and the World Bank. In fact, AIIB is not only meant to provide this support to Asian nations but is also aimed to “break the monopoly” of the existing economic order. By providing an alternative, it will drive IMF and World Bank “to function more normatively, democratically, and efficiently, in order to promote the reform of international financial system as well as democratisation of international relations.” In accordance with AIIB’s official agreement to work in “close collaboration with other multilateral and bilateral development institutions,” IMF and WB are supporting the creation of AIIB. While the United States and Japan remain key global actors, they have not yet signed on to its agreement. Evidently, the role of AIIB is not limited to its economic resources, but extends to influence the political world order as well. Reiterating India’s role in the development of AIIB, catapults India into a position of bringing in much needed change in the way finance is provided to the developing world.

 

Thirdly, India’s support and pairing with China, is certainly a positive direction in the relations between the two countries. Both countries are of the opinion that the Bretton Woods Agreement does not work in favor of the developing world and ignores the growth of countries like China and India. Both Xi and Modi have criticized the gridlocks of Bretton Woods. India and China have already shown significant improvement in their relations with both leaders visiting each other’s countries within the first year of Mr. Modi in office. This new relationship is only strengthened by the close collaboration for the creation of AIIB. This was further evidenced by the visit of Mr. Jin Liqun, President of AIIB, almost a week before the inaugural meeting of Board of Directors on January 18th. This visit just went to show how much China values its growing connectivity with its southern neighbor. However, India must tread carefully through this new tangible relationship with China, as it finds itself in a new position of strength. It must continue to have a friendly relationship with Japan and be confident in its non-involvement in political matters that pertain to China-Japan conflicts. Also, while this relationship is being created, India must continue to foster a healthy relationship with the United States. For the longest time, the US wanted to treat India as a natural ally in order to counter the growth of China. However, India’s opportunistic and regional role by working with China needs to be careful and not in contention with its positive relationship with the United States. The facts that India and China have been in a war and continue to have border issues cannot be ignored, but both Modi and Xi have come to a resolve that “those differences should not be allowed to come in the way of continued development of bilateral relations.

 

North Korea's Pakistan connection

North Korea's claim of enhancing its nuclear weapons program draws attention to the failure of global non proliferation regimes. The real failure however may not be in North Korea but in Pakistan. The presence of U.S. troops on the Korean peninsula and China's willingness to keep Pyongyang in check act as constraints on North Korea. The tendency of Washington to treat Pakistan with kid gloves leaves it without any sense of being contained.

On January 6, 2016, Pyongyang claimed it successfully tested a hydrogen bomb. Experts will take days to fully analyze whether or not North Korea had the technical capability to undertake a test of that magnitude but preliminary reports state that Pyongyang was lying. The AQ Khan Network run by the father of Pakistan's nuclear weapons program, Dr Abdul Qadeer Khan, sold sensitive technology to help North Korea build its program.

AQ Khan has never paid for what he did and no one knows for sure if we have all the information about the illicit network. No comprehensive investigation was undertaken by Pakistan or by members of the international community. Instead, then military dictator General Pervez Musharraf pardoned AQ Khan in 2004 after the latter gave "a televised confession in which he admitted selling the technology but insisted that he acted alone."

Khan was removed from his position but there was no accounting for his actions. An official Pakistani pronouncement to the effect that the problem had been addressed was deemed enough. Pakistan insisted the matter was closed and the United States accepted Pakistan's explanation because Washington needed Islamabad's help in the war in Afghanistan.

For decades, the United States has sought to control and curb the global proliferation of nuclear technology. Yet in an inexplicable development last year, some American experts and administration officials argued offering Pakistan a civil nuclear deal along the lines akin to the 2006 India-US civil nuclear deal. The delusion was this would bring Pakistan within a restraint regime and increase American knowledge about Pakistan's rapidly rising nuclear arsenal.

For the last six decades succeeding American administrations have indulged in the fallacy that more aid and materiel will provide them with greater leverage in Pakistan and that in turn will help them convince Pakistan to change its policies. As the title of former Ambassador of Pakistan to the United States Husain Haqqani's seminal book on U.S.-Pakistan relations notes the United States has lived in Magnificent Delusions for decades.

Right from independence in 1947, Pakistan's foreign and security policy has been centered on the desire for parity with its larger neighbor, India. Decades later, India is still the existential threat, instead of the radical jihadis that threaten to break up Pakistan.

Desirous of but unable to achieve conventional military parity with India, Pakistan's security establishment saw nuclear weapons as providing that parity. Pakistan's nuclear weapons program was and remains India centered. Pakistan's nuclear weapons, both for the state and the lay public, are integral to Pakistani national psyche and the needs of a security conscious state obsessed with India.

Over the years many experts, primarily American, have argued for India to accept restraints on its program and sign the Nuclear Non Proliferation Treaty (NPT). They assert Pakistan will follow suit thus placing the burden on India to act. However, that is a misconception.

The aim of Pakistan's nuclear weapons program is not deterrence that was achieved decades ago--- it is parity with India. Hence, it is almost impossible for any Pakistani government to accept restraints on their program unless they have achieved the impossible task of parity with India in this sphere as well.

Pakistan built its nuclear weapons program during the 1970s and 1980s while receiving massive American economic and military assistance. The military regime of General Zia ul Haq promised the Reagan administration that it would not build nuclear weapons. Yet as has been demonstrated in declassified U.S. government documents, Washington often turned a blind eye because of the need for Pakistan as an ally during the anti-Soviet Afghan jihad against the Soviet Union.

After secretly building its nuclear weapons during the 1980s, in the 1990s an elaborate global proliferation network came up in Pakistan centered on the figure of Dr Abdul Qadeer Khan. This network sold "nuclear secrets to any rogue state that came calling." North Korea was one of the many countries that benefitted from this largesse. "As many as two planes a month arrived in Pakistan from Pyongyang during the late 1990s, bringing the missile technology in exchange for AQ Khan's secrets, such as how to use centrifuges to enrich enough uranium for a weapon."

Other countries part of the network were Iran and Libya: the former is now seeking recognition as a nuclear weapons state while the latter agreed to give up its technology in return for removal of international sanctions and aid.

In December 2015, at a hearing of the U.S. House Foreign Affairs Committee subcommittee on the issue of Civil Nuclear cooperation with Pakistan, Chairman of the Subcommittee Congressman Ted Poe (R-TX) bluntly stated that the "A.Q. Khan Network is believed to have sold sensitive nuclear technology to the most unstable countries on the planet. It was the Khan Network that allowed North Korea to get its uranium enrichment program up and running."

Six decades of interactions with Americans have affirmed the Pakistani military's belief that cosmetic changes or words alone will suffice to convince the U.S., that Pakistan is a serious member of the international community and deserves to be treated as one.

That the fundamentals of Pakistani policy have not changed was demonstrated when in March 2015 an official from Pakistan's Strategic Plans Division, the key administrative organ within Pakistan' Nuclear Command Authority (NCA) made light of Jihadists having penetrated Pakistan's nuclear program. "We filtered out people having negative tendencies that could have affected national security," said the NCA official, as if that was sufficient to assuage international concerns.

This attempt to reassure the international community that Pakistan's nuclear weapons are in safe hands and will not fall into the hands of the Jihadis differs little from Pakistan's response to the troubling sale of nuclear weapons technology by Dr. A.Q. Khan and his criminal network.

Pakistan's reassurance about the security of its nuclear program ignores the possibility of a military officer with Islamist sympathies rising up the ranks. In that event, an Islamist would have his fingers on the nuclear trigger and could act independent of his institution, just as Dr. Khan single-handedly sold nuclear material and plans to Iran, Libya and North Korea.

There has been no introspection within Pakistan about the presence of a network that violated all international norms and there is little to no discussion globally on this issue either. Pakistan remains unwilling to change the substance of its policy on terrorism and also continues to build its nuclear arsenal even as it succeeds in reassuring the international community that it is ready for a drastic transformation.

Washington could, as before, simply ignore these warning signs and move on with business as usual. Or the next time Pakistan's army chief comes to town instead of being feted he could be asked tough questions on Pakistan's proliferation record.

If global non-proliferation is to be pursued seriously there has to be a way to make nations pay for bad behavior including on world proliferation. Until that is done threats like North Korea's will continue to surface.

This was first posted through Huffington Post.