International Relations (South-South Co-operation) by Viraj C. Rane

Model Answer

Question #1. How the debt trap policy of China threatens countries' ability to achieve self-reliance? Critically analyze the policy of India to engage with IOR countries to counter the growing influence of China. 10 marks (150 words)

Approach

1. Introduce by giving a definition of debt-trap policy of China (40 Words)
2. Briefly list the countries in IOR that are under debt of China and enumerate the opportunity this provides to India. (40 Words)
3. Enumerate the steps taken by India for engagement with countries in IOR (70 Words)
4. Enumerate the challenges faced by India (60 Words)
5. In conclusion write the way forward (40 Words 

Hints:

 Debt-trap diplomacy describes a situation where a powerful lending country or institution seeks to saddle a borrowing nation with debt so as to increase its leverage over it. China has significantly expanded its engagements in the Indian Ocean region (OBOR) over the past three decades. China has been using the financial tool of debt to gain influence across the world and grab considerable power in India’s neighboring countries, thereby increasing the amount of political and security threats the nation is exposed to

Countries affected by China’s debt-trap diplomacy:

• SRI LANKA: Colombo handed over the port of Hambantota to China on a 99-year lease due to non-payment of Chinese borrowings. While Sri Lanka faces its worst economic crisis since independence with food and fuel shortages, soaring prices and power cuts, many believe that China’s “debt-trap diplomacy” is behind the crisis.
• DJIBOUTI: Similarly, another port in Djibouti, a country that has been the main military base of the US in Africa, is now on the verge of being taken over by a Chinese company due to heavy debt. In Djibouti, public debt has risen to roughly 80 percent of the country’s GDP (and China owns the lion’s share), placing the country at high risk of debt distress.
• PAKISTAN: The China-Pakistan Economic Corridor (CPEC) is said to be the first project of BRI. Four years ago, the then Prime minister of Pakistan had said that CPEC would prove to be a “game-changer” for Pakistan and South Asia. But the way Pakistan has sunk into debt after four years shows that is not the case.
• NEPAL: Nepal is delaying on signing an agreement worth $56 billion to establish a TransHimalayan Multi-dimensional Connectivity Network under the BRI, which also includes a crossborder railway. Nepal is apprehensive of signing the commercial agreement because of concerns over the financing of the project.

Steps taken by India to engage with IOR countries:

• SAGAR Policy: Security and Growth for All in the Region (SAGAR) is India’s policy or doctrine of maritime cooperation in the Indian Ocean region.
• Participant in various sub-regional and regional organisations:

 – This helps in engagement and better cooperation with IOR countries.

– Examples: Indian Ocean rim Association, Indian Ocean naval Symposium

• Infrastructure development and providing aid to IOR countries:

 – India has recently undertaken infrastructure development projects with dual-use logistics facilities in Mauritius and Seychelles

– Sri Lanka has agreed to accelerate the Indian assisted development project in the country and the possibility of promoting investments by the private sectors of India.

– India has supplied nearly 85 million hydroxychloroquine (HCQ) tablets and close to 500 million paracetamol tablets to 108 countries. o The HCQ tablets were sent as gifts to Mauritius and Seychelles on special Indian Air Force planes.

• Military Exercises:

– Naval Exercise MILAN, hosted by the Indian Navy

 – Exercise Malabar is a trilateral maritime event between India, Japan, and the United States and aims at strengthening cooperation and enhancing interoperability among participants. Recently Australia was also invited to the Exercise.

 Challenges faced by India:

• China’s Economic Heft:

– While China is able to promise more investments in development projects in various countries, India has lagged behind and mostly provides short-term, project specific loans to countries.

• Poor delivery of promises by India:

– Our economic cooperation programme has not delivered expected results as many of the projects suffer from procedural delays and don’t get implemented for years.

• Internal Politics in countries:

 – In many neighbouring countries, like Bangladesh, Sri Lanka and Maldives, while one political party wants to cooperate with India, the other is more inclined to engage with China. This diminishes India’s efforts.

Conclusion: The Debt-trap policy of China has become a new neo-colonialist tool and is impacting the Indian Ocean Region (IOR). This provides an opportunity for India to step up its game in IOR. India’s contribution to human resource development is appreciated in its neighbouring countries. But it needs to increase the efficiency of its delivery to its neighbours, which have time and again looked up to India to counter China. Thus, China’s debt-trap diplomacy has opened new doors for India to engage with its neighbours and build a cooperative and prosperous South Asian region

Question #2. Despite its initial years of dormancy BIMSTEC holds the potential to act as the vehicle of transformation in the region. Discuss. 15 marks (250 words)

Approach

1. Give a background of BIMSTEC in introduction (40 words)
2. Trace the journey of BIMSTEC in its initial years. (60 words)
3. Discuss how the relevance of BIMSTEC has increased in recent times from Indian point of view. (110 words)
4. Conclusion (40 words)

 Hints:

Changing geopolitical realities in the region have brought about a renewed interest in the Bay of Bengal. As the regional grouping of choice in South Asia — the South Asian Association for Regional Cooperation (SAARC) — flounders with strained India-Pakistan relations, New Delhi has realized that BIMSTEC will allow for a broader playing field.

Dormancy of BIMSTEC in its initial years:

• Despite it being formed in 1997, BIMSTEC did not have a headquarter till 2011 and a permanent secretary general till 2014.
• BIMSTEC was unable to conclude its FTA (free trade agreement)despite it being an economic grouping in its years.
• Exclusion of other key Bay of Bengal littoral states like Indonesia, Malaysia and Singapore also led to critics to question its relevance.
• In the 90s India regional policy was mainly SAARC centric hence New Delhi too didn’t invest enough diplomatic capital in BIMSTEC.

Revival of BIMSTEC and its current significance:

• Due to continuous obstructionist nature of Pakistan, SAARC has becoming moribund in recent years which concomitantly increased the relevance of BIMSTEC in Indian strategic calculus.
• Bay of Bengal littoral region which was devoid of any major conflict in the 90s is becoming a center of geo-political rivalry of major powers due to rise of China and USA Indo-pacific strategy hence BIMSTEC is poised to play a key role in the future.
• For India, it is a platform to leverage economic and political developments through its ‘Act East’ policy with increased interconnections with the Association of South East Asian Nations (ASEAN) through priority areas like connectivity for a conducive, sustainable, peaceful and prosperous Bay of Bengal region.
• With India becoming the third dialogue partner of ASEAN to inaugurate an ASEAN Connectivity Coordinating Committee-India Meeting in 2013, the BIMSTEC can function as a liaison organization in actualizing these projects as there are common members in both groupings (i.e., Myanmar and Thailand).
• BIMSTEC can also play a key role in development of north-east region. With projects like IndiaMyanmar-Thailand trilateral highway and Kaladan multi-model project BIMSTEC can as a platform to execute our “neighborhood first” and “act east” policy.

 • Along with north-east BIMSTEC can also revitalize economic cooperation between Sri Lanka and southern states of India. Conclusion: Despite holding enormous potential India need to be circumspect to avoid BIMSTEC becoming another SAARC. Accusation of being dominated by India and inroads of China in the region can derail the potential of BIMSTEC. Indian foreign minister has recently announced that BIMSTEC is going to bepriority for next five years and only through sustained push and constructive cooperation with other member India can realize the potential of BIMSTEC to make Bay of Bengal littoral region a powerful economic block.