~ By Chandrachur Singh

It is seldom that national leaders willingly travel that extra mile in international negotiations especially on vexed collective action issues, where their own developmental claims and rights could perceptibly be at stake in doing so. In the light of such a yardstick, the Paris Climate Summit (CoP-21, December 2015) qualifies as a rare diplomatic feat. The summit recognised voluntarism, transparency, support systems and understanding between states and communities within them as the only way forward for any realistic and time-bound solution to the problem containing climate change. Mounted on the value planks of equity, integrity, vulnerability, specificity, capability and responsibility, the negotiations worked out at Paris clearly attempt to reconcile development with climate sensitivity on the one hand and balance capabilities with differential responsibilities on the other. And it was only in the right earnestness that our Prime Minister described it as a ‘win for climate justice’[1].

One unambiguously accepts and endorses Prime Minister Modi’s characterization of the Paris summit as a ‘win for climate justice’. If that indeed is a correct assessment of the Paris Summit, then the most important issue at hand is to work out things that India would have to do as part of its duties and voluntary commitments towards achieving the ideal entailing ‘climate justice’. A related issue then would be to figure out how Indians can act in accordance with such expectations.

In its latest report (2014) the Intergovernmental Panel on Climate Change has described India as one of the most vulnerable nations to climate change impacts. The prediction that erratic and extreme monsoons would very severely impact India’s agriculture sector is really scary given the fact that nearly 70 per cent of India’s population is involved and dependent on agriculture and allied activities. The report outlines that the climate change impacts in India would affect not just land utilisation, agricultural production, food security and price stability but most significantly factors engendered by it i.e. rainfall variability, snowmelt, glacier retreat as well as evapo-transpiration. It also states that other acute such as fresh-water scarcity and the spread of both water and mosquito borne diseases like diarrhoea, cholera and malaria could prove as a big menace. The report largely confirms the assessment of the impacts done by the Postdam institute for Climate Impact Research and Climate Analytics on behalf of the World Bank in the year 2013.

Taken together, the two reports apprehend that Climate Change would severely impact most of the other major sectors of India’s economy such as energy, transport, tourism resulting in significantly slowing down of the efforts to reduce poverty as well as the ones targeted towards delivery of goods and services to its people especially those living in rural, far flung, as well as less accessible regions. Rampant poverty, highly imbalanced infrastructural preparedness as well as inadequate planning only adds to India’s vulnerabilities to climate change impacts.

Now let’s look at all these predictions in the light of certain other facts. The International Energy Association in its report published in the year 2013 states that India is now the world’s third largest greenhouse gas (GHG) emitter, having tripled its carbon dioxide emissions from fuel combustion between 1990 and 2011 alone. According to the IEA report with its rising economic and political status India’s emissions would increase by almost 2.5 times between 2008 and 2035.

In fact, such citations have been effectively used by the United States to evade from signing a legally binding treaty that would commit it to significantly reduce its GHG emissions which are disproportionately very high when compared to India’s share of emissions. For example, the per capita emission of India, with 17 per cent of world’s population, was one ton of CO2 emissions in 2013, whereas in the United States, with less than five per cent of the world’s population, per capita emissions were 17 t CO2 (IEA 2013). These facts compel us to investigate factors that plausibly account for the shifts in India’s climate change discourse.

It has been argued that there has been a growing realization amongst the policy makers and think tanks in India around the issue of ‘co-benefits’ i.e the development of policies and strategies that could, on the one hand, lead to a successful pursuance of developmental objectives, and, on the other, could be cited as good steps for addressing climate change impacts (Kapur et al 2009; Dubash 2011)[2]. However, complete reliance on the traditional stand would only result in international impasses that could well take it far away from both, the developed and the least developing economies (many of the vulnerable small islands as well as other countries in Africa). With its international leadership aspirations such as the permanent membership of the UNO soaring high, India would most certainly ill afford such developments.

Further, this is not only in tune with India’s preferred path of providing moral leadership by the way of ‘practicing the professed’ but would significantly allow it to play a weightier role in international climate negotiations. The warmth and mutual admirations that now characterize the Indo-US relationship could well be an additional important factor driving the shifts. The ever burgeoning Indo-US relationship definitely demand and require that both sides not only avoid mutual disagreements and antagonistic positions but to the best of their abilities, remain on the same page on some of the most critical issues that confront international politics today.

The shifts also to a large extent reflect the growing consensus amongst the global scientific community about the fact that the threats of global warming are real and here to stay. The impacts are in many instances already visible in India and that has propelled many civil society associations and other local institutions to deliberate, develop and urge the federal government to act. It also has fuelled initiation and development of alternative discourses of the developmental narratives that focus on living in consonance with nature.

The increased media coverage, the announcement of the Fifth Report by the IPCC, increased instances of climatic variations resulting in tragedies and natural disasters such as the one at Kedarnath in the year 2013 have all resulted in increased governmental activities on Climate Change. The establishment of the Prime Ministers National Council on Climate Change and the Expert Group on Low Carbon Strategies for Inclusive Growth by the Planning Commission (now the NITI Ayog) have increasingly domesticated the issue of climate change. It also means that new and more innovative ideas related to the issue would naturally surface up.

The primary shift in climate change discourses in India has been from a frame that externalized the climate change problem and solutions towards a “co-benefits” approach, where policies aim to align climate change with domestic priorities of poverty alleviation and economic growth. A shift in the emission trajectory, without compromising on the goal of increasing energy access, for example, through increased investments in renewables, and promoting energy efficiency, have thus emerged as common themes. Focus on the development of clean and renewable energy resources such as solar energy is not only in line with India’s quest for more equitable access to energy, it also provides it an ideal opportunity to surge ahead as the leader in what would most certainly be the key source of energy in future.

II

India’s responses to climate change have been built on the moral foundations of equity and fairness. As mentioned earlier, in the recent years however, it has been consistently displaying a very pragmatic approach, inherently characteristic of a deal maker. In fact, in the run up to the Copenhagen CoP, in 2008, India came out with a detailed policy document called National Action Plan on Climate Change (NAPCC)[3], formally elaborating its key strategies for addressing climate concerns.

Motivated deeply by Mahatma Gandhi’s assertions of a self-sustaining life that is sync with nature, the NAPCC entails a bottom–up approach that seeks to realize developmental objectives through an increasing reliance on renewable energy resources harnessed through the use of cutting edge green technology. The idea is to usher in a new developmental framework that while being less carbon driven also supports indigenous mitigation and adaptation practices.

For an effective realization of the NAPCC, eight sectoral missions have been also been outlined.[4] These include the National Solar Mission; the National Mission for Enhanced Energy Efficiency; the National Mission on Sustainable Habitat; the national water Mission; the National Mission for Sustaining the Himalayan Ecosystem; the National Mission for a Green India; the National Mission for Sustainable Agriculture; and the National Mission on Strategic Knowledge on Climate Change (PM’s Council on Climate Change 2008). The first three missions aim at reducing the emissions, whereas the later three are adaptation centric and the last two are designed to disseminate knowledge and responses on climate change. The objective of all these missions is to ensure that developmental priorities and plans are pursued in climate sensitive ways.

The climate concerns of India require it to make a judicious balance between pursuing developmental priorities on one hand and responding to mitigation and adaptation related responsibilities on the other. The task in hand is both simultaneously mutually reinforcing and complex. It is mutually reinforcing in the sense that socio- economic development is a must for ensuring that the vast majority of India’s poor people have access to basic minimum conditions of a rightful and dignified life. Interestingly, socio- economic development is also a prerequisite for saving millions of its people from the catastrophic impacts of climate change. The complexity of the task is however, related to reconciling the plausible contradictions between pursuing carbon-intensive affordable developmental plans and fulfilling mitigation related responsibilities simultaneously.

For India, coal is the most important energy resource because of its accessibility as well as affordability. It is not only world’s third largest coal producer[5] but the relative high cost of other non-conventional energy resources makes coal- fired energy plants most suitable for its developmental needs. It must be mentioned that India’s coal consumption has been projected to almost 1.5 billion (IEA 2015) metric tons by the year 2020[6]. With an annual consumption of almost 800 tons (IEA 2015), India is currently world’s third largest coal consumer, and the appetite is only to grow significantly in future as it moves ahead towards poverty alleviation and empowerment[7]. Given the fact that the Paris climate treaty has already been described by the Indian Prime Minister as being just and fair, what responsibilities will India undertake and how will it reconcile them with its existing developmental priorities are some of the issues that I take up next.

III

Socio economic development has always been India’s top priority and the additional imperative of negating the adverse impacts of climate change only strengthens and deepens them. In the aftermath of the Paris climate treaty, however, India will have to find a better way of aligning its developmental imperatives with climate sensibilities. It is obvious that India’s massive infrastructural deficiencies along with the imperative of securing minimum basic needs of a vast majority of its own population imply that it cannot completely give-up on its carbon-driven developmental model yet. However, the ever intensifying impacts of climate change also impel the establishment of a more open and robust technological and financial collaboration with the developed world. With the impacts of climate change already becoming evident, such techno-financial collaborations will not only enhance India’s access to greener technologies but also significantly aid its adaptation needs.

Adoption of economically viable mechanisms for production and conservation of green energy in terms of clean energy production and conservation is at heart of India’s mitigation strategies. India has already demonstrated its willingness and commitment to improve upon its carbon intensity by reducing, as far as possible, its reliance on carbon to propel its development and growth. In the run-up to the Paris Climate Meet, India submitted its Intended Nationally Determined Contributions (INDC) to the UNFCCC, for the period 2021-2030[8].

India’s INDC reflect its firm commitment to achieving and securing developmental goals like food security, poverty eradication, healthcare availabilities etc. in most climate sensitive ways – following low carbon pathways. It commits India to be propagating a healthy and sustainable way of living based on traditions and values of conservation and moderation and reducing the emissions intensity of its GDP by 33 to 35 percent by 2030 from 2005 level; achieving  about 40 percent cumulative electric power installed capacity from non-fossil fuel based energy resources by 2030; generating 175 gigawatts of renewable energy development by 2022 with the help of transfer of technology and low cost international finance including from Green Climate Fund (GCF)[9]. It also proposes to create additional carbon sink of 2.5 to 3 billion tonnes of CO2 equivalent through additional forest and tree cover by 2030[10]. It has also pledged to source 40 percent of its electricity from renewable and other low carbon sources by 2030 compared to 2010 levels[11]. Moving away from fossil-fuel driven developmental model and achieving these professed goals means that India will have to be open in establishing partnership and alliances aimed at effectively addressing challenges related to climate change, without giving up on its own developmental needs and priorities. The launching of the International Solar Alliance, by India at the Paris Climate Summit with the objective of technology sharing and finance mobilising is a testimony to its seriousness and resolve.

Access to technology is important for India’s plans for meeting its ever increasing energy requirements through more sustainable and climate friendly sources. Establishing an efficient transmission and distribution system would immensely help in improving energy efficiency and offsetting the growth in energy consumption (on account of continued developmental march). In any case, achieving professed goals mean that India will have to undertake actionable plans promoting its energy security and to that end it will have to reduce its reliance on hydro-carbons. By an estimate, India’s current capacity to generate solar energy is about 75 gigawatts per day[12] against the world standards of 227 gigawatts[13]. India’s current capacity to generate wind power is 23 gigawatts (IEA 2015: 32) which would be required to be increased by four times to balance the limitations of the solar energy.

In addition to emission reduction attempts, a key requirement for India is also to undertake adaptation centric steps. One major way through which this can be done is by greatly increasing its GHG sequestering capacities by expanding its forest covers. It has been argued that, in order to be able to absorb 2.5 to 3 gigatons of carbon from the atmosphere, India will be required to enhance its dwindling forest cover significantly by almost 19-20 million hectares by 2030, while improving the quality of another five million hectares of forests. According to estimates made available by the World Bank, India will have to increase its forest cover by 10 per cent to take it to 33 per cent.

*Chandrachur Singh teaches Political Science at Hindu College, University of Delhi. At present he is the India Country Champion and Universitas 21, Doctoral Fellow at the University of Birmingham UK.

[1]http://www.thehindu.com/news/national/paris-agreement-a-victory-of-climate-justice-says-modi/article7983268.ece

[2] See Dubash, N. (2011). Introduction. In: N. Dubash, ed., Handbook of climate change and India: development, politics and governance, 1st ed. New Delhi: Oxford University Press, pp.1-27. Also refer to: Kapur, D., Khosla, D. and Mehta, P. (2009). Climate change: India’s options. Economic and Political Weekly, 36, pp.34-42

[3]  Government of India, ‘National Action Plan on Climate Change’ Prime Minister’s Council on Climate Change, 2008, available at http://pmindia.nic.in/Pg01-52.pdf Accessed on June 27, 2016

[4] ibid

[5] http://www.mining-technology.com/features/featurecoal-giants-the-worlds-biggest-coal-producing-countries-4186363/ Accessed,  9 June 2016

[6] https://www.eia.gov/todayinenergy/detail.cfm?id=22652 Accessed 9 June 2016

[7] ibid

[8]http://www4.unfccc.int/submissions/INDC/Published%20Documents/India/1/INDIA%20INDC%20TO%20UNFCCC.pdf accessed on June 28, 2016

[9] ibid

[10] ibid

[11] ibid

[12] http://www.mnre.gov.in/mission-and-vision-2/achievements/ accessed on June 28, 2016

[13] Available on http://www.ren21.net/wp-content/uploads/2016/06/GSR_2016_KeyFindings1.pdf accessed on June 28, 2016

~ By Bryan Stout

2016 is a U.S. Presidential election year. This year comes with the usual high drama in politics for electing one of the most visible and important offices in the USA. This year’s cycle, however, is more unique than others with the nomination of a real estate billionaire and reality T.V. star Donald Trump as the Republican candidate for the President’s office. This year we have an election that has thus farand will likely defy political analysis. However, despite the sound bites, Twitter wars and new campaign tactics, the cold hard facts of electoral-college math cannot be ignored.

One feature of the U.S. Constitution, right from the 18th Century, has been that the electoral college allows for electors (actual individuals) to be selected based on a state’s congressional representation (number of U.S. Representatives plus two) when each state has two U.S. Senators. The candidate who receives a majority of electoral-college votes (270)is elected as the President. So, one might conclude that California with 55 electoral votes is the most important state for the Trump and Clinton campaigns. However, since all but two states award their electoral-college votes on a “winner takes all” basis, and California is solidly a Democratic state, Trump and Republicans will have to look elsewhere for electoral-college votes.

After we sort out each of the 50 states (and Washington, D.C.) based on competitiveness, we are left with only a handful of truly competitive states or “swing” states. Chief among these swing states are Florida (29 electoral votes), Pennsylvania (23 votes), Virginia (13 votes) and Ohio (18 votes), among a few others. The difficulty that Donald Trump faces is that the electoral map for Republicans in general has been getting more and more challenging since George Bush’s re-election in 2004. In fact, Donald Trump will not only have to win all of the states that Mitt Romney won in 2012, but also pick up states like Florida, Ohio, and Virginia for a chance to win the White House.Is this possible?

If this past year has taught us something it is that anything is possible in American politics.But this is a tall order for a candidate who seems to be more committed towards driving out his supporters to vote than reaching out to new voters. It should be noted that the second place finisher in the Republican presidential primary race, Texas Senator Ted Cruz failed to endorse Trump during his convention speech and John Kasich, the sitting Republican governor of swing state Ohio and third place finisher in the Republican primary behind Ted Cruz has so far declined to support Donald Trump.

While Mr. Trump has a difficult task ahead of him, Secretary Clinton also faces her own challenges. While the FBI decided not to proceed with criminal charges, it did condemn her handling of classified information. Adding to this, there is a continued tension and lack of trust among many Democrats for Mrs. Clinton especially after a bruising primary contest with Vermont Senator Bernie Sanders.

Unfortunately, a growing number of voters across America feel they are faced with voting for the “lesser of the two evils” and are exploring not voting or voting for a third party. When included in polling questions, Libertarian candidate (and former Republican Governor of New Mexio) Gary Johnson polls between 9-11 per cent nationally – a significant increase over the party’s past presidential performances.

Donald Trump’s pick of current Indiana Governor, Mike Pence gives the ticket a degree of governing experience.Also, Pence, who hails from Indiana, has a track record of pursuing conservative policies in Indiana, which often appeals to Republican votes. Since Indiana has been the state that voted for Barack Obama in 2008 but switched back to the Republican column in 2012, this is going to be a state to watch out for. It would be interesting to see how Trump wins the other swing states if he cannot carry Indiana.

In Virginia, Hillary Clinton’s recently announced Tim Kaine as Virginia Senator. While Obama carried Virginia both in 2008 and 2012, the margins were extremely slim and George Bush carried the state in 2000 and 2004. If Clinton counts on Kaine to deliver his home state (where he also served as governor) and he does, that would be a major blow to Trump’s efforts to win the needed electoral-college votes.

Beyond the running mates and the math of the electoral there are some issues that have, at this point, seemed to raise themselves to the top of the American voters’ minds. Not surprisingly is the issue of the candidates themselves. Critics of Donald Trump point out that in addition to his total lack of government experience, the billionaire’s sterling business reputation is undeserved. They citethe failed Trump University venture and subsequent class action lawsuit by those who purchased Trump’s product and felt that they were taken advantage of. Mr. Trump alleged that the federal judge in the case is biased against him. Trump says that because he is running for president and has a tough stance on illegal immigration (the judge himself is a citizen from Indiana, but is active in immigration politics and his parents are immigrants from Mexico). Trump’s brash nature and “shoot from the hip” comments have endeared him to many across the country, but additionally turned off others who view his unfiltered comments as un-presidential or even worse.

Of course, Hillary Clinton has her own set of issues that are part of the political discussions of this election season. Like Trump, she has a very high negative rating with many voters and has some serious trust issues to overcome, some dating back to her days as First Lady – as early as 1992. While Clinton claims her experience as U.S. Secretary of State (and Senator and First Lady prior) make her more imminently qualified for office, supporters of the Secretary are hard pressed to name even one major achievement during her time in the U.S. Senate she claims. Her days as Obama’s Secretary of State narrate her failures of U.S. Policy in Libya and the on-going crisis in Syria and a more aggressive Russia.

Substantive issues on the campaign trail this season seem to be shifting more to security – both at home and abroad – in the light of the terrorist attacks in, France and Germany, as well as the shootings in the United States and the worsening relationship between police forces and African American communities. Trump has promised to be the law and order candidate and the only candidate who can ignite the U.S. out of the morass internationally. All the while Clinton has been saying that her experience as Secretary of State and her calls for a national dialogue on race and racism to address the issue of violence in many American cities stands in her stead.

The economy is always a major focus for campaigns and this election will likely be little different. With the U.S. still engaged in a tepid recovery from the Great Recession and fears of international economic slowdown ever-present, many Americans are concerned that their children may not have as high a standard of living as they have. What is different in this cycle is that Donald Trump has strayed away from the traditional Republican arguments for lower taxes across the board and free trade and suggested that people like him can pay more in taxes. Additionally, while candidates of the past and in the Republican primary have pushed for mild reforms to entitlement spending (such as Social Security) in order to ensure long term financial solvency, Mr. Trump has dismissed changing any aspect of the program during his time as President.

However, with any discussion of issues, we should note that this election may not focus so much on issues this time around, if they ever really did in presidential politics in America. While there are some voters who examine party planks and platforms, and weigh the pros and cons of each candidate on each of the issues important to them, these voters are likely to be in the minority. Many times a candidate will either succeed or fail because of some intangible quality, such as “How does he appear or sound ‘presidential” (as some criticize Trump) or that “She is not likable as a person” (as others have alleged against Mrs. Clinton), and not so much on their stand on any one issue. Predicting what will be on voters’ minds when they vote and what is most important to them (“likability” of a candidate, a stance on issues, the party affiliation of the candidate, etc.) will be the name of the game leading up to the election this November.

So with all the polls and prognostication, and analysis, can we say who will likely end up on top come this November? Given the almost unexpected rise of Donald Trump to secure the Republican nomination and the surprisingly vigorous primary challenge by Senator Bernie Sanders to Secretary Clinton, anything is possible this season. There could be horrible gaffs, breaking world headlines, or an “October surprise” revelation that changes the calculus almost overnight. Nationally, it looks like the polls are fairly even, with Mr, Trump enjoying a post-convention bounce. But we must remember that this election is the battle in the trenches for each of the states. Can the Clinton campaign count on what appears to be superior grass roots efforts to identify voters and turn them out in November? Or has Donald Trump ushered in a new age of politics when traditional methods of contesting an election are now secondary giving way to getting free media attention and mastering Twitter in order to make headlines? Only time will tell.

The author has campaigned during US Presidential Elections for Ohio in 2005. He cuurrently resides in Columbus, Ohio. 

~ By Sanjal Shastri

The past two years have been particularly challenging for Turkey. On one hand, the Turks are facing threat from the ISIS. Sharing a porous border with Syria, it becomes a vulnerable target. The host of attacks on tourists and the attack on Istanbul airport add to the long list of ISIS attacks. On the other hand, Turkey also is also fighting a Kurdish separatist group the PKK. The July 16 Coup attempt adds a new dimension to Turkey’s duel battle.

There are some fundamental differences between Turkey’s ISIS and PKK problems. The PKK is fighting for a separate Kurdish homeland whose proposed territory includes parts of Turkey. Unlike the ISIS, the PKK is a secular organization. It is not involved with the ISIS’ larger goal of creating a caliphate. It is a group that operates across the international border with Syria. All the PKK fighters are Kurdish in ethnicity. The ISIS on the other hand is a part of a much larger global network. Turkey’s role in the international coalition against the ISIS and the open border with Syria make it an ideal target. Another fundamental difference between the PKK and the ISIS is the profile of targets they choose. The PKK mainly target government instillations. None of the PKK’s attacks have targeted civilian areas. The ISIS on the other hand chooses targets that are more crowed and often frequented by tourists. While there are marked differences between the two groups and their activities there is an underlying link between the war against ISIS, the PKK and the recent military coup attempt.

Concerns over law, order and national security due to the ISIS and PKK were factors that contributed to the attempted military coup. This was not the first attempt at a military takeover in the country. In 1960, 1971, 1980 and 1997 four civilian governments were overthrown. Economic hardships, threats to the secular fabric of the state and spiraling security issues were common factors that led to these coups. In 2016 similarly the government of Erdogan, has been accused of heavy handedness and threatening the country’s secular fabric. Increasing attacks by the ISIS and PKK have exposed the government’s failure to deal with national security. Going by the events in Turkish history, there is a link between increased instability and military coups.

The security concerns surrounding the PKK and the ISIS have put Turkey in a precarious position in Syria. On one hand Turkey wants to see the defeat of the ISIS. Their increased presence and activities in Syria make them a serious security threat. On the other hand Turkey is also concerned about the position of Kurdish separatists in Syria. A stronger and more autonomous Kurdish region in Syria would strengthen the Kurdish separatists in Turkey. The challenge for Turkey today is that the Kurdish forces will play an important role in defeating the ISIS. They have been able to put up effective resistance against the IS in the Kurdish regions of Syria. To add to this, the Turkish government has come out openly supporting Basher al-Assad’s removal. While Turkey would be happy to see the defeat of the ISIS and the removal of president Assad, it would not be confortable with the Kurdish regions gaining greater autonomy. Given the current situation on the ground, defeating the ISIS would require some sort of a partnership with the Kurdish groups and President Assad. The USA has already softened its stand on Assad, taking note of his importance in the battle against ISIS. This leaves Turkey with a very difficult choice to make.

The attempted military coup complicates Turkey’s fight against the ISIS and the PKK. On one hand Turkey is seen as a key NATO allay in the fight against ISIS. The coup and the international response have strained ties between Turkey and the NATO allies. Within a day of the coup President Erdogan was quick to point a finger at Fethullah Gülen, a cleric who is in exile in USA. The claim has not gone down well with the American establishment. The Turkish government also closed down the airspace for American jets. This has put American operations against ISIS positions in Syria on hold. The increased tensions between Turkey and other NATO members will impact the fight against the ISIS.

Domestically, the failed coup is bound to create tensions between the military and the government. The coup comes at a time when the government is trying to up military operations against the Kurdish separatists in Turkey. On one hand there was growing concern within the military over the rising costs of Erdogan’s hardline approach. Just two days before the coup, the government signed a bill, which gave the military immunity against any judicial probe into the military’s activity domestically. Now after the coup it is difficult to see the government going ahead and implementing this bill. The success of Turkey’s fight against the Kurdish separatists depends on how effective a role the military would play. With strained ties between the government and the military, there are concerns over the status of military operations against the Kurdish groups.

The failed military coup has created a ‘Turkish Triangle’. The strained civil military relations add a new dimension to Turkey’s fight against the ISIS and PKK. A simultaneous fight against Kurdish groups, the ISIS and Basher al-Assad is not a viable option for the Turkish government. The key role being played by Kurdish groups and President Assad in the fight against ISIS makes them an important factor in the battle. Turkey today faces a difficult choice. The attempted military coup has added a new dimension to Turkey’s problems. The strained relations between Turkey and her NATO allies have impacted the fight against the ISIS. It has already led to a halt in US’ air operations against ISIS. Domestically the strained civil-military ties pose a challenge to the military operations against Kurdish separatists. Now, lacking the confidence of the military, there are question marks over President Erdogan’s battle against Kurdish separatists. Over the coming days, two factors are will determine the future course of events. Firstly, international response to the coup and its aftermath will determine how ties between Turkey and her NATO allies shape up. The questions over the extradition of FethullahGülen will decide how Turkish equations with USA change. Strained ties between Turkey and other NATO members would jeopardize the international fight against ISIS. Secondly, the battle against Kurdish separatists will hinge on President Erdogan’s ability to win back the confidence of the military. With the military’s support needed to continue the battle against Kurdish groups, one will need to keep a close eye on how the civil-military relations pan out over the coming days.

Sanjal Shastri is an Academic Associate with the Indian Institute of Management, Ahmedabad. The views expressed are his own and do not represent the views of the organization he is associated with.

~ By Siddharth Singh

The Indian Ocean Region is a very diverse region with great potential& prospect and it holds substantialstrategic importance. The region also holds significance because of the global and intra-regional trade which passes through it and for the value of its aquatic resources. The security of the Indian Ocean region is important for all those nations which faces its waters and also for all those nations which depend on the global maritime trading system by using Indian Ocean as a passage.

The Indian Ocean represents an increasingly significant avenue for global trade. Rising prosperity in Asia, growing dependence and therefore linkage between producers and consumers on natural resourcesacross the Asia and Africa andalso the existence of globalized supply chains and distribution networks are binding the region ever more closely using the mediumof the Indian Ocean. At the same time, emerging problems likepiracy, terrorism and global environmental pressures on the coastal and marine resources pose significant governance challenges for maritime policy-makers around the Indian Ocean Region (IOR).

Strategically thecrucial choke points across the Indian Oceanplay both roles:  as a facilitator by reducing travel distance and sometimes by putting constraint; if these bottlenecks come under wrong hands then it could cripple dependent economies. The seven key chokepoints in the IOR are the Lombok Strait, the Sunda Strait, the Malacca Straits, the Strait of Hormuz, the Suez Canal, Mozambique Channel, and the Bab el Mandeb.

Although sharing the same ocean, the Indian Ocean Region displaysincrediblemultiplicityas well as divergences in the littoral countries’ politics, culture values, economic models, and environmental concerns.Despite the noteworthy geographical span and large and growing population of the Indian Ocean region, it has long suffered comparativenegligence in the geopolitics of world affairs. During most of the 20th century, the region’s role and prominencewere generallyeclipsed and considered subsidiary to the super power rivalries playing out happeningsomewhere else in the globe. While the Indian Ocean Regionhas now risen to the forefront and features more prominently in world geopoliticsincluding the strategic interests and commercial controls of extra-regional powers such as the US, EU nations, Japan, and China, the littoral states of Indian Ocean are also increasingly influencing regional and global geopolitics.

The Indian Ocean Security Outlook

The security outlook for the Indian Ocean region is increasingly important for global stability and prosperity because it encompasses a vital and expanding intersection of geostrategic rivalries, economic ambitions, resource competition, environmental management, development challenges and demographic change. Its geostrategic importance is accentuated by the fact that it is the most intensively used and strategically important trade highway in the world. A broad architecture of security cooperation among Indian Ocean and non-regional states needs to be responsive to the growing complexities in the region along with the rising geostrategic importance of IOR. In doing so, it needs to accommodate legacies from the region’s past and respond creatively to its contemporary and future challenges.

The complex realities of the security outlook in the Indian Ocean have fundamentally important implications for its security architecture. The region is simply too vast in its geography, too diverse in the economic needs and priorities of its constituent states, and too disparate in its strategic outlooks to accommodate a ‘one-size-fits-all’ approach to regional security architecture. The Indian Ocean region’s security outlook demands responses that are practical, adaptive and multi-layered. It needs to reflect the realities of major power cooperation and competition, alliance frameworks, sub-regional groupings and more plurilateral arrangements. Strategic competition, particularly among major powers such as the United States, China and India is inevitable, but such competition needs to be balanced by strategic cooperation to minimise misunderstanding and misinformation, and to strengthen habits of cooperation on specific issues.

In addition to major power relations, aspects of Indian Ocean security are also critically affected by alliance and strategic partnerships involving regional and non-regional states. Some of those partnerships are longstanding and established; others are emerging and evolving. Some are bilateral; others are more broadly based. But all such partnerships constitute only a dimension of regional security architecture, and not the sum total of it.

On a range of issues – such as economic development, piracy, terrorism and illicit trafficking – more plurilateral mechanisms which involves major as well as minor powers, can offer the most productive way forward. Such coalitions of interest can embrace strategic partners as well as competitors; and they can be formal or informal.Sub-regional structures in the Indian Ocean region also play niche roles in support of regional development and security.

The key question for the future of the Indian Ocean’s security architecture is how it’s existing and emerging gaps – at major power level and at multilateral level – are going to be filled in order to accommodate the evolving challenges and opportunities in the region. The more productive way forward for the Indian Ocean’s security architecture is a genuinely multi-layered one that addresses State security and human security challenges, and that is designed to promote strategic cooperation as well as manage the realities of strategic competition.

A productive security architecture in the Indian Ocean is always going to have layers of bilateral and plurilateral interaction characterising it. The challenge is to make that mosaic as complementary, practical and intersecting as possible in order to advance the objectives of strategic stability and economic development that regional states share.

Analysing the Role of Indian Ocean Rim Association (IORA)& Indian Ocean Naval Symposium (IONS):

There are some plurilateral initiatives that focus in a more genuinely regional way on Indian Ocean economic and security issues. They include the Indian Ocean Rim Association (IORA) and the Indian Ocean Naval Symposium (IONS).

The Indian Ocean Rim – Association for Regional Cooperation (IOR-ARC) was formally launched at its first ministerial meeting in Mauritius in March 1997; and was renamed IORA at the council of ministers meeting in Perth in November 2013. IORA currently has 21 member States, seven dialogue partners and two observers. Its objectives are to promote sustainable growth and balanced development in the region and of its member states and to create common ground for regional economic cooperation. It strives towards building and expanding understanding and mutually beneficial cooperation among the countries in the Indian Ocean region.

IORA contributes to trade and investment facilitation among 21 Indian Ocean littoral countries, with important input from seven dialogue partners – China, France, Egypt, Japan, the United Kingdom, Germany and the United States. While IONS, with Indian Ocean littoral states as members and with engagement by extra-regional states as well, effectively promotes maritime cooperation and productive information flows among relevant navies particularly in relation to doctrines, procedures, capabilities, organisational and logistical systems, maritime safety and operational processes. These two Indian Ocean multilateral processes are highly desirable but are structured to achieve quite specific purposes. Neither constitutes a region-wide deliberative forum covering the broad range of Indian Ocean security and development issues.

IORA priorities are more practically focused on maritime safety, freedom of the high seas, disaster response and risk management, economic growth through regional trade facilitation and customs simplification, sustainable use of Indian Ocean resources, more effective fisheries arrangements and oceanic research as well as enhanced people-to-people links through tourism, education and business. IORA objectives still remain broad and aspirational. Over time, they would only achieve their potential if they are calibrated more specifically to benchmarks, timelines and practically focused work. The resurgence of the Indian Ocean Rim Association(IORA) is critical, given the region’s economic dynamism, huge marketsand rich natural resources.The growing geo-strategic and geo-economic salience of the IORA makes itevidently clear that there should be greater regional collaboration among thestakeholders to effectively address and confront non-traditional securitythreats such as maritime terrorism and piracy; trans-national crimes; andenvironmental & natural disasters.

IORA is the most suitable multilateral vehicle for the Indian Ocean region. If IORA has to achieve  more tangible outcomes in coming future then it would be best for it to keep its focus restricted to just the four “super priority” areasnamely maritime safety and security; trade and investment facilitation; fisheries management; and, disaster risk management.

The Indian Navy initiated IONS in 2008 to promote cooperation between navies, coastguards and marine police in the Indian Ocean region. It was inspired by and modelled on the Western Pacific Naval Symposium (WPNS) created by the Royal Australian Navy in 1988, to provide a regional mechanism for navies and maritime forces to meet periodically to discuss and interact on matters of common interest and to pursue cooperative engagement and initiatives. The key objectivesare to bring together regional navies and maritime forces to synergise their collective resources, and to maintain good order at sea in the Indian Ocean.

IONS are a voluntary initiative with membership limited to the Indian Ocean littoral states. Following the progress of IONS since its inception shows that the ‘Chairmanship’ matters. While there are a multitude of common interests, particularly in the maritime domain, not involving extra-regional countries that have important interests and stakes in the region may prove to be a major stumbling block.

In relation to IONS, its future evolution as a forum for enhancing professional naval exchanges, capacity building and interoperability will be critical for the effectiveness of the region’s security architecture. IONS should include freedom of navigation (including freedom from piracy), facilitation of maritime trade, safety of life at sea, environmental protection, information sharing, and humanitarian assistance and disaster relief arrangements.IONS are a vital facilitator of navy-to-navy understanding and professional cooperation. But neither it encompasses the political dimensions of regional security cooperation nor or the wider dimensions of national security as perceived by regional states.

The security architecture of the Indian Ocean region would be further strengthened if arrangements such as IORA and IONS were complemented by other multilateralinitiatives. This will be important if the Indian Ocean region is to develop a practical, adaptable and multi-layered security architecture.

India’s Geostrategic interests in the Indian Ocean

K.M. Panikkar, pioneer Indian geo-politician, argued more than 60 years ago that ‘Since India’s future was dependent on the Indian Ocean, then the Indian Ocean must therefore remain truly Indian’. Even earlier, in the 16th century, Portuguese Governor of Goa Alfonso Albuquerque was of the opinion that ‘Control of key choke points extending from the Horn of Africa to the Cape of Good Hope and the Malacca Strait was essential to prevent an inimical power from making an entry in the Indian Ocean’.

Yet post-independence, and until the end of the Cold War, India reduced its influence to within the sub-continent, thus limiting its influence to South Asia only. However, after 1991, India took a different approach and embraced a new open-minded policyalong with economic liberalisation, privatisation and globalisation. This policy included enlarging India’s political, diplomatic and economic spheres, and forging defence contacts in the Indian Ocean region and beyond. For the first time, India’s ‘Look East’ policy focused on Southeast Asiato shore up India’s ability to compete geopolitically with other powers like China.

The fact is that India is a maritime nation, not just by historical tradition but also because it’s geophysical configuration and geo-political circumstances makes it as dependent on the seas. India’s national security must treat the maritime space as an important dimension of its rising power status and a key component of its economic growth and energy security, although the strategic concepts of its maritime role have yet to be fully developed. For India, achieving closer diplomatic and economic relations with the Indian Ocean littoral states and other major powers has assumed added importance because a number of security analysts have asserted that energy security needs to be India’s primary strategic concern for the next 25 years, and that India must take urgent steps to address these needs in the Indian Ocean region. India also needs to pursue more aggressively the deeper economic ties with other Indian Ocean littoral states so as to develop leverages that would make them less inclined to facilitate Chinese access. More widely, if India develops cooperative security relationships with the larger littoral states of Southern Africa, Indonesia and Australia, it would achieve another of its aims of furthering its strategic reach. More targeted response of India is required which should be focused on enhancement of ‘hard power’ capabilities and interaction among strategic partners and like-minded countries.

India and China are both dependent on Sea Lines of Communications (SLOCs) through the Indian Ocean for secure energy routes and the free movement of trade to ensure their continued economic development. The potential geostrategic encirclement of India, through a combination of ports in the Indian Ocean (‘String of Pearls’) and China’s de facto alliance with Pakistan, creates a security dilemma for India. To secure itself against this possibility, India must ensure that the choke points in the Indian Ocean region remain open and free, ensuring the conditions for its continued economic growth.

India’s geostrategic interests has been very well articulated by Prime Minister Shri Narendra Modi himself. He said, “Indian Ocean, occupy a vital place in India’s national security and economic prosperity. The Indian Ocean Region is one of my foremost policy priorities. Our approach is evident in our vision of “SAGAR”, which means “Ocean” and stands for – Security and Growth for All in the Region. We would continue to actively pursue and promote our geo-political, strategic and economic interests on the seas, in particular the Indian Ocean”.

Conclusion

The emergent scenario of naval power in the Indian Ocean region is diversified and complex, with a variety of challenges and threats to the region. Evolving Maritime Multilateralism with extra-regional powers will be a very important dimension of India’s naval strategy and diplomacy in the Indian Ocean Region. India, being a dominant power in IOR, should be able toshape and influence the future discourse on the Indo-Pacific maritimeorder and for that India needs to develop a range of measures to secure its own interest in IOR which includes enhancing its military capability. In IOR, India has also engaged in capacity building in the form of gifting naval vessels and naval aircraft, enabling smaller Indian Ocean island states (like Maldives, Mauritius and Seychelles) to boost their maritime and air surveillance capabilities.Continued economic development and internal stability are also prerequisites for the successful execution of India’s strategy to counter China’s expanding influence in the Indian Ocean region. Additionally, India must further pursue its ‘Act East’ policy to achieve multilateral cohesion and leverage with Southeast Asian nations and other key stakeholders in the broader Indo-Pacific region. India must also pragmatically develop a closer relationship with the US, which has a common interest in ensuring that the SLOCs remain open and free.

The maritime security challenges must be addressed on a multifaceted basis. Some challenges that are primarily located around the Indian coast require a unilateral approach like the issue of policing and law enforcement functions. Other challenges such as military exercises which involvethe US Navy and other country’s naviesrequire a bilateral approach. A multilateral approach is desirable toward solving transnational criminality and upholding maritime order in the region.While regional cooperation between navies and coast guards must take centre stage in the evolving order, non-military maritime cooperation is equally important. Navies of littoral countries as well as navies of extra regional power must reorient themselves from the existing mind-set of ‘preparing for war in order to ensure peace’ to that of ‘if you want peace and stability,be prepared to cooperate.’

The security of India depends on the security of the Ocean and the countries that are littoral of it. India has to look to create strong relations with like-minded countries to serve India’s own national interest. India has made a new start with PM Modi’s visits to many of the Indian Ocean littoral countries.India has the potential to take the leadership role in the Indian Ocean Region and to transform it byfocusing on Security and Growth for All in the Region (SAGAR), as envisioned by Prime Minister Modi.

References:

1. http://www.iora.net/charter.aspx
2. 13th Meeting of the Council of Ministers of the Indian Ocean Rim Association, Perth Communiqué, 1 November 2013

http://www.iora.net/media/139388/perth_communiqu__2013.pdf

3. IORA Maritime Cooperation Declaration,Padang, 23 October 2015

http://www.iora.net/media/160000/iora_maritime_cooperation_declaration_2015.pdf

4. http://ions.gov.in/
5. IONS Charter Version – Mar 2014

http://ions.gov.in/sites/default/files/IONS_Charter_Version_28_March_2014_0.pdf

6. PV Rao, Indian Ocean maritime security cooperation: the employment of navies and other maritime forces, Proceedings, Indian Ocean Maritime Security Symposium,47–48
7. Ranjit B Rai, The Indian experience of strategy and the Indian perspective on maritime strategy in the 21st century in the IOR, paper delivered at the Conference on Strategic Theory, Stellenbosch, 11–12 June 2009, 6–7.
8. Rajeev Sawhney, Indian Ocean maritime security key issues and perspectives, Proceedings, Indian Ocean Maritime Security Symposium, 39–40
9. Geopolitics and Maritime Security in the Indian Ocean: What Role for the European Union? A joint policy brief of The Hague Institute for Global Justice and the Clingendael Institute.
10. Ensuring Secure Seas: Indian MARITIME Security Strategy 2015
11. Book: Growth of Naval Power in the Indian Ocean: Dynamics and Transformation, Author: W. Lawrence S. Prabhakar

• Book: Maritime Perspectives 2016, Edited by Vijay Sakhuja and Gurpreet S Khurana
• The Asia-Pacific Maritime Security Strategy: Achieving U.S. National Security Objectives in a Changing Environment

Siddharth Singh is pursuing his M.Phil. from Centre for Indo-Pacific Studies, Jawaharlal Nehru University, New Delhi. His Email ID is sidd4india@gmail.com Twitter ID: @Sid4india

~ By Sanjaya Baru

In his rare classic India and the Indian Ocean: An Essay on the Influence of Sea Power on Indian History, historian K.M. Pannikar reminded us, “Milleniums before Columbus sailed the Atlantic and Magellan crossed the Pacific, the Indian Ocean had become an active thoroughfare of commercial and cultural traffic.” ^[1] Thanks in part to its geography, given the annual and seasonal flow of winds, the sociology of the enterprising traders of Gujarat and the Coromandel coast, and the enterprise of Arab traders the Indian Ocean was one of the early theatres of maritime trade and cultural intercourse.

With the rise of Asian economies, their growing dependence on Asian energy, with the emergence of Africa as the new continent of economic growth and the eastward turn of both Africa and West Asia, as they sell more of their resources to Asia rather than the West, the centre of gravity of global commerce has shifted from the Atlantic to what is now described as the ‘Indo-Pacific’. Consequently, the Indian Ocean has again become the crossroads of global commerce.

Placed as it is on the roof of the ocean, India has lent its name to the ocean by its historical role in shaping the flow of commerce and culture. India’s civilizational footprint is all too visible even now across and around the Indian Ocean. Little wonder then that that European cartographers gave names such as ‘Atlantic’ and ‘Pacific’ to the two other oceans but chose to name the waters touching the landmass of Africa, on the east, the Indian sub-continent on the north and Indo-China and Australasia, in the west, as the ‘Indian Ocean’.

History

In his masterly study of civilisation and capitalism through the 15^th to the 18^th centuries historian Fernand Braudel draws attention to the dominant presence of India in the Indian Ocean region. ^[2] Braudel refers to the region spanning the Arabian Sea, the Bay of Bengal, the Straits of Malacca and the South China Sea – what is now referred to as the Indo-Pacific- as the “greatest of all the world economies” of the pre-industrial, pre-capitalist era. ^[3]

The Far East, says Braudel, comprised of “three gigantic world-economies”: “Islam, overlooking the Indian Ocean from the Red Sea and the Persian Gulf, and controlling the endless chain of deserts stretching across Asia from Arabia to China; India, whose influence extended throughout the Indian Ocean, both east and west of Cape Comorin; and China, at once a great territorial power – striking deep into the heart of Asia – and a maritime force, controlling the seas and countries bordering the Pacific. And so it had been for many hundreds of years.”^[4]

“The relationship between these huge areas,” says Braudel, “was the result of a series of pendulum movements of greater or lesser strength, either side of the centrally positioned Indian subcontinent. The swing might benefit first the East and then the West, redistributing functions, power and political or economic advance. Through all these vicissitudes however, India maintained her central position: her merchants in Gujarat and on the Malabar and Coromandel coasts prevailed for centuries against their many competitors – the Arab traders of the Red Sea, the Persian merchants of the Gulf, or the Chinese merchants familiar with the Indonesian seas to which their junks were now regular visitors.”^[5]

Pannikar notes, from ancient Indian texts as well as records of Asian travellers, including Chinese travellers, of centuries of Indian dominance of the Indian Ocean. From fifth century B.C. to sixth century A.D., says Pannikar, “this naval supremacy rested with the continental powers in India.” [6]  The Sri Vijaya Empire, based in Sumatra, dominated the eastern seaboard of the Indian Ocean well into the 10^th century. “The period of Hindu supremacy in the Ocean was one of complete freedom of trade and navigation.” Records Pannikar. [7]

With the decline of Hindu kingdoms in India and South-east Asia, Arab rulers and merchants gained dominance over the Indian Ocean. They were then replaced by the Europeans. Through the era of colonialism the Indian Ocean became a theatre of geo-economic and geopolitical contestation between European powers. It is thanks to their dominance over the Indian Ocean that the British built and sustained a global empire. [8]

Economics

One consequence of the harmful impact of British colonialism on India’s economic development was to turn India inward, and shun trade with the outside world. In 1950, India’s share of world merchandise trade was 2.0 per cent, compared to 1.3 per cent for China. By 1990, India’s share was down to 0.5 per cent, while China had inched up to 1.8 per cent. By 2010, the relevant numbers were 1.4 and 10.4, respectively!

The neglect of foreign trade, thanks to the export-pessimism of Jawaharlal Nehru’s economic planners and policy makers, contributed to this economic disengagement with the world as well as to a strategic neglect of maritime trade and security. After India’s reintegration with the world economy in 1991, the share of trade in India’s national income began rising. External trade in goods and services accounted for 16.2 per cent of India’s national income in 1950, and remained around this level till 1990. By 2010 the number was up at over 50.0 per cent, making India more trade-dependent than many OECD economies, including the United States.

Table 1: India’s External Trade Openness (Percentage Shares of GDP)

          Source: Vijay Joshi, India’s Long Road: The Search for Prosperity, Penguin Allen Lane, India, 2016.

                        Table 12.1. Page 263

Table 2: India: Direction of Merchandise Exports (Percentage Share)

              Source: Ministry of Commerce, Government of India

This shift in India’s dependence on external trade was accompanied by an equally significant shift in the direction of trade. While Western Europe and North America were India’s dominant trade partners in the 1950s and through to the 1990s, there was a directional shift after 1990. Partly as a consequence of the rise of East and South-east Asian economies in the intervening period and partly as a consequence of India’s own ‘Look East’ policy, the share of East Asian and South-east Asian economies in India’s merchandise exports increased sharply. This was matched by an equally impressive rise in the share of West Asian economies – the member countries of the Gulf Cooperation Council (GCC) in particular – in India’s import and export trade. To add to this, India’s trade with Africa, especially Southern African and East African economies as also her trade with Australian and New Zealand grew at a faster pace than her trade with the trans-Atlantic economies.

All of this has meant that more than sixty per cent of India’s external trade is now with countries that are directly linked to the Indian Ocean and the Indo-Pacific region. But, of course, even the trade with Europe and the Americas traverses the Indian Ocean.

The increase in the share of trade in national income is a reflection of the growing importance of export-oriented industries and services. Most of them, both goods and services, are increasingly located in peninsular India – including the coastal states of Gujarat, Maharashtra, Karnataka, Kerala, Tamil Nadu and Andhra Pradesh. The emergence of, for example, a competitive automobile and related industries in Tamil Nadu and Maharashtra has made port development a priority in these states. The growth of a petroleum refining and petro-products industry in Gujarat has had a similar impact on the development of Gujarat’s port infrastructure.

The New Maritime Economy

The most important reason for India’s external trade dependence almost entirely on the Indian Ocean is the fact that its land links with Eurasia have been disrupted by the access denial imposed by Pakistan.  Through history, a large part of India’s trade with the Eurasian landmass – right up to Europe – was by land and passed through what are now Pakistan and Afghanistan. Historian Scott C Levi has recorded the role played by “Hindu traders”, for centuries in financing and facilitating the trade between India and Central Asia and beyond, all the way to Europe. [9]

If land-based trade to India’s west has been disrupted by Pakistan, that to India’s east has been limited by inadequate infrastructure. India is now seeking to bridge this gap by investing in road and rail connectivity with Bangladesh and Myanmar, and securing land access to the markets of South-East Asia. Indeed, even to the west, the new India-Iran port, rail and road development projects are intended to offer India land connectivity to Eurasia through Iran. Inter-regional connectivity with her wider neighbourhood has become the cornerstone of regional cooperation for India.

Indian Foreign Secretary S Jaishankar put it pithily in his address to the Raisina Dialogue in New Delhi in March 2016 when he said, “The Indian Ocean, once regarded as a maritime frontier, is today increasingly seen as a connectivity pathway……….These waters must not only get better connected but remain free from non-traditional and traditional threats that could impede the seamless movement of goods, people and ideas.” [10]

Even as the land-based connectivity infrastructure gets established, the waters around the Indian peninsula will remain her main link to the markets of the world. Pannikar was prescient to observe in 1945: “The commercial interests of India … her vast markets and her great natural resources, can be reached through the Indian Ocean and her recent industrial growth, with consequent expansion of trade, emphasises the necessity of safe sea communications.” ^[11]

Over a decade ago India launched the ‘Sagaramala’ programme of improved ports and port connectivity to ease the flow of goods and develop globally competitive infrastructure in Indian ports. New port development in almost all coastal states has increased the importance of the maritime economy for the development of these states.

To quote Foreign Secretary Jaishankar again, “Our maritime agenda envisages port development that would harness the capabilities of the private sector. It is also important that the nodes of outward connectivity are linked better to the hinterland. The integrated development of ports and the hinterland, the objective of our SAGARMALA project, would surely have profound consequences over time.” [12]

More recently, India has resumed ship building, after several decades of neglect. In the 1940s India had a globally competitive shipbuilding industry that thrived due to war demand. However, thanks to its inward-oriented industrialisation strategy India neglected its shipbuilding industry and late-comers like South Korea not only overtook India but emerged as globally competitive shipbuilding economies. Today India is teaming up with South Korea to rejuvenate its shipbuilding capabilities. [13]

Energy

Energy security is an important aspect of India’s maritime economy and strategy and a key determinant of its Indian Ocean strategy. Of all the trade links that India has with the Indian Ocean region none is more important than the trade in oil and gas. India’s economic rise has increased its dependence on imported energy. Not only is the import of crude oil increasingly important for the Indian economy, but also the export of refined petroleum and petroleum products. While India seeks to become more self-reliant in energy, by developing nuclear and renewable energy, it will continue to be a major consumer of imported hydrocarbons and exporter of petroleum products.

Here again, given Pakistan’s negative role in promoting land-based pipelines that can give India access to West and Central Asian gas and oil, India has no option but to depend on the Indian Ocean to access its energy needs. Apart from West and Central Asia, India is also sourcing and investing in oil and gas exploration in South-east Asia and East Africa.  All this imparts a strategic dimension to India’s trade dependence on the Indian Ocean.

The importance of the Indian Ocean to global energy security cannot be over-emphasised. More than two-thirds of all oil that is traded is carried over sea by oil tankers, while less than a third is carried through pipelines. Most of the oil carried by ships passes through the Indian Ocean. The Straits of Hormuz and Malacca are key chokepoints. These lie on either side of India.

People

It is not merely merchandise trade and investment flows that make the Indian Ocean region important for India. Over centuries people of Indian origin have set sail over the ocean to inhabit lands all around it. Some of these settlements, like Mauritius, have great strategic and economic value for India. Others, like the Gulf states, offer employment opportunities for millions of Indians and help India earn billions of dollars every year. Over six million persons of Indian origin living in the Gulf region repatriate home annually over US$ 50 billion.

While India has developed the capability to airlift hundreds of thousands of people from the West Asia and North Africa region during times of conflict and distress, it has also demonstrated capability to quickly bring them out by sea and offer sea-based security to these communities. Indian ships were able to rescue thousands stranded in Libya during the conflict there. During the tsunami in December 2004 Indian ships were able to provide rescue and relief to stranded people around the Indian Ocean region.

People of Indian origin living in South-east Asia and Africa also extend India’s cultural footprint. Over the past two decades India has actively pursued a policy of reaching out to the Indian diaspora. The dominant Indian communities in the Indian Ocean region are of Gujarati, Tamil, Telugu, Bihari and Bengali origin. Many continue to retain their original cultural identity even when they have fully integrated into local communities and may well be immigrants going back five generations and more.

Maritime Security

Thanks to India’s pre-occupation with land-based threats from Pakistan and China and the uncertain nature of her land borders in the immediate post-Independence period, Indian national defence strategy was focused on military and air power to the relative neglect of naval capability. This neglect of maritime security was compounded by India’s choice of an inward-oriented economic development strategy, with a consequent decline in India’s share of world trade. Pannikar warning of 1945, that “An exclusively land policy of defence for India will in future be nothing short of blindness…….. The freedom of India will hardly be worth a day’s purchase, if Indian interests in the Indian Ocean are not to be defended from India,” went unheeded for a long time. ^[14]

During the Cold War Indian strategic policy remained focused primarily on ensuring that the Indian Ocean did not become one more theatre of superpower rivalry. This was the main objective of India’s stated goal of ensuring that the Indian Ocean would be “a zone of peace.” However, with the end of the Cold War and with the rise of China, maritime security in the Indian Ocean has acquired a new relevance for India. [15] The threats of terrorism, sea piracy, failed states, religious radicalism and civil wars afflict several countries around the Indian Ocean region.

India’s security and economic stability has been directly targeted from the ocean. Apart from the high profile incident of sea-based terrorist attack on Mumbai’s financial district in November 2008, there have been incidents of piracy and illegal movement of lethal equipment with serious implications for India’s national security and the safety of the Indian Ocean sea lanes of communications.

To add to these new security concerns, the increasing global and regional integration of the Indian economy and the increase in the share of seaborne foreign trade in India’s national income also brought issues relating to maritime security into national security focus. Consequently, India has had to increase its budget for the navy and has set up a new naval command in the Andaman & Nicobar Islands.

Indian Ocean and the Global Economy

The geo-economic importance of the Indian Ocean derives from the growing importance of Asia in the world economy. More than 60 per cent of all oil and petroleum product exports are shipped through the Indian Ocean waters and over 70 per cent of global container traffic is carried through the waters of this ocean. The share of trans-Atlantic trade in world trade has been declining, that of the trans-Pacific remains static while the share of Indian Ocean trade is growing. [16]

Hence, ensuring freedom of access and movement into and out of the Indian Ocean, through its various entry and exit points – what are called ‘chokepoints’ – is essential not just for the stability and security of India and Asia, but also for the stability and sustainability of global trade and economic growth.

To be sure, the Indian Ocean is not just the crossroads of the world and the centre of gravity of the global economy but it is also a rich depository of marine resources, including minerals, oil and gas, fisheries and marine life. As the region’s biggest country, placed strategically at a vantage point over-looking the ocean, India has a special role in ensuring the security and stability of the Indian Ocean region.

India’s participation in organisations such as the Indian Ocean Rim Association (IORA) and a range of maritime exercises and initiatives, is pursued within a cooperative framework. Pannikar defined India’s long-term policy towards the Indian Ocean thus: “It cannot be less than the development of a balanced regional navy capable of (a) operating as a task force within its own area; and (b) cooperating with the high seas fleets of friendly nations in the strategy of a global naval warfare.” [17]

Pannikar drew attention to the strategic importance of the straits of Hormuz and Malacca as well as the Gulf of Aden in ensuring India’s defences, since these are the entry points into the Arabian Sea and the Bay of Bengal. India has taken a step further in ensuring its strategic presence deeper south, with a base in Mauritius, and has entered into a range of defence relationships with several Indian Ocean rim nations.

These relationships are important both from a defence perspective and a trade and economic perspective. However, the Indian Ocean is more than a thoroughfare or a depository of natural resources. It is today home to a large number of highly successful economies. Hence, India has sought to build mutually beneficial bilateral strategic economic relations with a large number of them including Singapore, Australia, Iran, Oman, United Arab Emirates, Mozambique, Mauritius and South Africa. Pannikar viewed Singapore and Socotra merely as naval bases protecting India. That was in 1945.

Today, Singapore and Dubai have become major financial centres with a rising stake in India’s economic prosperity. Mauritius too is an important economic partner for India. The government of Prime Minister Narendra Modi has taken several important steps in building a long-term strategic partnership with Mauritius, Singapore and the UAE. There are no better examples of the synergy between an economic and a defence partnership than these relationships. By linking together cooperation in the fields of defence, security, economy and finance the Joint Statement on a Strategic Partnership between India and Singapore issued in Singapore by Prime Ministers Narendra Modi and Lee Hsien Loong in November 2015 both countries have underscored the relevance of this synergy to their bilateral relationship. Both countries are bound to play an important role in the security and prosperity of the Indian Ocean region.

Map 1: Trade Routes and Major Ports in Indian Ocean Region

Source: Brahma Chellaney, World’s Geopolitical Centre of Gravity Shifts  to Indian Ocean. Accessed at: https://chellaney.net/2015/07/01/worlds-geopolitical-center-of-gravity-shifts-to-indian-ocean/

Notes

[1] K.M. Pannikar, India and the Indian Ocean: An Essay on the Influence of Sea Power on Indian History, George Allen & Unwin, London, 1945. (2^nd Edition, 1951, Page 23). I found a copy of the 1951 edition in the library of the National University of Singapore. The book bore the stamp “University of Malaya Library. September 1960”. I read this book during my stint at the Lee Kuan Yew School of Public Policy in 2008-09. The book is out of print. I have urged the National Maritime Foundation in India to reprint this classic.

Other important studies of Indian maritime activity in the Indian Ocean region include: Ashin Das Gupta, The World of the Indian Ocean Merchant, 1500-1800, New Delhi: Oxford University Press, 2001; and Holden Furber, Sinnapah Arasaratnam & Kenneth McPherson, Maritime India, Oxford University Press, New Delhi, 2004. On the idea of the ‘underlying unity’ of the Indian Ocean region see K.N. Chaudhuri, Trade and Civilisation in the Indian Ocean: An Economic History from the Rise of Islam to 1750, Cambridge University Press, UK. 1985.

[2] Fernand Braudel, Civilization and Capitalism, 15^th-18^th Century: Volume II. The Wheels of Commerce, London: Fontana Press, 1985.

[3] Fernand Braudel, Civilization and Capitalism, 15^th-18^th Century: Volume III. The Perspective of the World, Chapter 5, London: Fontana Press, 1984, pp. 484.

[4] Ibid., pp. 484-535                                                        .

[5] Ibid., pp. 484.

[6] Pannikar (1951), Page 32

[7] Pannikar (1951), Page 35

[8] For a delightful re-telling of the history of the Indian Ocean civilisations see Sanjeev Sanyal, The Ocean of Churn, How the Indian Ocean Shaped Human History, Penguin Viking, Delhi, 2016.

[9] Scott C Levi, Caravans: Indian Merchants on the Silk Road, Allen Lane by Penguin, India, 2015.

[10] S Jaishankar, Keynote Address to Raisina Dialogue, Observer Research Foundation, New Delhi, 2 March 2016. Accessed on 20 July 2016 at:

http://mea.gov.in/Speeches-Statements.htm?dtl/26433/Speech_by_Foreign_Secretary_at_Raisina_Dialogue_in_New_Delhi_March_2_2015

[11] Pannikar (1951), Page 91

[12] Jaishankar (2016)

[13] Wendy laursen, “India and Korea Boost Shipbuilding Ties”, The Maritime Executive, 19 May 2015. http://www.maritime-executive.com/article/india-and-korea-boost-shipbuilding-ties

[14] Pannikar (1951), Page 90

[15] There is now considerable literature on the strategic importance of the Indian Ocean in the context of China’s rise and India’s economic modernization. See for example: Robert D. Kaplan, Monsoon: The Indian Ocean and the Future of American Power, Random House, New York, 2011. Peter Dombrowski & Andrew C. Winner (Editors), The Indian Ocean and US Grand Strategy: Ensuring Access and Promoting Security, Georgetown University Press, Washington DC, 2014.  David Brewster, India’s Ocean: The Story of India’s Bid for Regional Leadership, Routledge, 2014. C. Raja Mohan, Samudra Manthan, Sino-Indian Rivalry in the Indo-Pacific, Carnegie Endowment for International Peace, Washington DC, 2012.  Vijay Sakhuja, Strategic Dynamics of the Indian Ocean, Emirates Lecture Series, Volume 96. 2012. Krishnappa Venkatshamy, The Indian Ocean Region in India’s Strategic Futures: Looking Out to 2030, in Jivanta Schottli (Edited), Power, Politics and Maritime Governance in the Indian Ocean, Routledge, UK, 2015.

[16] UNCTAD, Review of Maritime Transport 2015, United Nations Conference on Trade and Development, Geneva, 2015.

[17] Pannikar (1945), Page 96.

~ By Sunil Raman

In the two years since assuming office Prime Minister Narendra Modi has made a decisive difference in positioning India and in addressing its security concerns. His initiative in the Indian Ocean Region is one such prominent break from the past. The disjointed and hesitant steps of the past is giving way to a more structured approach where Modi works towards translating India’s natural geographical advantage and close cultural ties with many countries in the region to position itself as the central force in the region.

Modi has promised to bolster India’s presence in the Indian Ocean Region and enhance co-operation with countries like US, Japan and Australia.

The US-India Joint Strategic Vision for Asia Pacific and Indian Ocean Region and the signing of US-India Defense Framework have signaled the determination of the two nations to join hands in maritime security.Malabar joint naval exercises started as a bilateral arrangement between US and Indian navies in 1992 where Japan used to be an invitee has now transformed into a Trilateral Forum where the three navies would conduct joint exercises alternating between Indian Ocean and the Pacific Ocean. The latest exercise was conductedoff northern Philippines, close to South China Sea where Chinaaggressively contests territorial claims of some South East Asian countries like Philippines and Vietnam.

Modi sheds inhibitions, claims India’s natural leadership position in IOR

It was Modi’s visit to Indian Ocean nations of Mauritius and Seychelles in 2015 that brought global attention to change in strategy by New Delhi when he shared, in the words of strategic affairs expert C Raja Mohan, “India’s master plan for Indian Ocean Region”.

Charting out India’s cultural footprint across Asia and Africa Modi said India must also assume “our responsibility to shape its future” and declared Indian Ocean Region to be at the “top of our policy priorities”.

He then spelt out the five-point vision for IOR:

1. India will do everything to safeguard our mainland and islands and defend our interests. To ensure a safe, secure and stable Indian Ocean Region that delivers us all to the shores of prosperity.
2. To deepen our economic and security cooperation with our friends in the region especially our maritime neighbours and island states. We will also continue to build their maritime security capacities and their economic strength.
3. Collective action and cooperation will best advance peace and security in our maritime region. It will also prepare us better to respond to emergencies.
4. We also seek a more integrated and cooperative future in the region that enhances the prospects for sustainable development for all.
5. Those who live in this region have the primary responsibility for peace, stability and prosperity in the Indian Ocean.

Initiatives that seek to revive cultural links and help build sustainable economies among littoral states, Project Mausam and SAGAR, were launched with clear strategic vision.

The Modi government had been pushing cultural and military diplomacy as a tool for deepening strategic partnerships in the Indian Ocean region. These include joint exercises, hydrographic surveys, equipment transfer, joint training, and access to military academies in India among others.

From visiting Pacific islands to Indian Ocean littorals, and a recent trip to East African countries prime minister Modi has made a determined bid to reconnect with countries, some of which have been part of India’s cultural sphere of influence and look upon India to take the lead.

Promised projects that remained caught in bureaucratic files in New Delhi were dusted out and the Modi government has committed to help Seychelles develop infrastructure on Assumption Island, and to speed up development of Agalega Island in Mauritius.

Trips to Mozambique, South Africa, Tanzania and Kenya in June 2016 were to widen maritime security partnership.

For years India has been slow or indifferent in its response to many countries in Asia and Africa who eagerly looked up to New Delhi to use its growing economic muscle and historic links with them to assist in neutralizing China’s growing footprint in the region. That lethargy has given way to greater determination to lead from the front in securing waters while helping strengthen economies of IOR nations.

Few months ago the new version of Indian Maritime Doctrine was released to coincide with the International Fleet Review 2016. This document has enlarged India’s areas of maritime interest to south-east and westwards of Indian Ocean.  It states that with growing economic and military strength of the country, the national security imperatives and political interests stretch “beyond the Indian Ocean Region.”

Change in tack was emphasized by the then Naval Chief Admiral RK Dhowan in the strategy document when he observed that “there seems little doubt today that the 21st century will be the ‘Century of the Seas’ for India and that the seas will remain a key enabler in her global resurgence”.

Importance of Indian Ocean

 Unlike the Pacific and Atlantic Oceans, the Indian Ocean is not just open waters but is bound by land on the East, West and North. Instead enclosed within a land mass on all sides, it has kept people and civilizations that came up on the contiguous land masses, in perpetual contact. India, by its sheer geographical location and size, lent its name to these waters that saw Indian kings of the ancient world transfer considerable ideological and religious influence to countries in South East Asia.

These waters were never owned by any kingdom or country. No country, including India, in spite of its dominating presence, ever claimed ownership of these waters. The Indian Ocean has been “a great highway… a wide common”, in the words of the great naval historian, Alfred Thayer Mahan in ‘The Influence of Sea Power upon History’.

The Indian Ocean connects three continents – Asia, Africa, Australia and the Antarctica. It is home to one-third of the world’s population, also being the largest market for consumer goods, with two-thirds of proven oil reserves, one-third of world’s natural gas, 90 per cent of world’s diamonds, 60 per cent of world’s uranium and 40 per cent of world’s gold reserves.Its waters constitute the lifeline with one-half of world’s crude oil container shipment and one-third of bulk cargo passing through.

  It is also home to world oil transit chokepoints. Bound by land on three sides maritime access  for tankers and cargo vessels transporting oil and other cargo from one part of the world to the other is through narrow gateways or narrow sea lanes. Free and unhindered passage through these sea routes is essential for global energy flows. Closure of these narrow gateways or choke points can disrupt the flow of oil and gas leading to a devastating impact on global economy and security. Unlike other oceans 80 per cent of total trade in Indian Ocean is extra-regional and only 20 per cent trade between littoral states.

These waters connect four major land bodies-Africa, Asia, Australia and Antarctica. Thirty-five countries, including six island nations, are Indian Ocean Rim states or littoral states and “40 per cent of the world’s seaborne crude oil supplies and 50 per cent of the world’s merchant fleet”depend upon the security of these waters. Crude oil from the Persian Gulf destined for South Asia, South East Asia and the Far East passes through its waters. Apart from “principal oil shipping lanes” the “main navigational choke points of world commerce” – the Straits of Bab el Mandeb, Hormuz and Malacca – are located in the Indian Ocean. There are others like the Suez Canal, Cape of Good Hope, Sunda Strait,  Lombok Strait, Ombai and Wetar Straits.

Critical choke points

1. Bab el Mandab-Between the Horn of Africa and the Middle East, a strategic link between Mediterranean Sea and Indian Ocean. Located between Yemen, Djibouti and Eritrea it is 18 miles wide at its narrowest point and makes tanker traffic difficult.
2. Strait of Hormuz-World’s most important oil chokepoint in the Persian Gulf through which more than 85 per cent of crude oil exports to markets of Japan, India, China and South Korea. With Iran to its north the Strait of Hormuz is 21 miles at the narrowest part.
3. Straits of Malacca-Links the Indian Ocean to the Pacific Ocean and provides the shortest sea route between Middle East and the growing Asian markets. Located between Indonesia, Malaysia and Singapore, it links the Indian Ocean to South China Sea and Pacific Ocean. It is 1.7 miles at its narrowest point and remains a crucial chokepoint. But, its importance emerges from over 60,000 ships that transit the Straits annually carrying a quarter of world trade.

The Indian Ocean Region is also home to some of the most unstable countries like Somalia and Yemen, radical Islamic outfits, terror groups and small island nations that are threatened by climate change.

  The growing military presence of various stakeholders poses a grave threat to the region’s stability, as any untoward incident has the potential to create a major disruption in cargo traffic and movement of energy supplies

World Map sidelines Indian Ocean Region

 Geography, however, has been at the mercy of global politics with a “bias against the Indian Ocean” established from the time of the European domination of the world, through the Cold War years, and until recently. The world map made by Gerardius Mercator fourcenturies ago and in use even today reinforces the prejudice against this region with the western hemisphere located at the center of the map and the Indian Ocean split on the edges of the map. Such a map has kept attention focused on the western hemisphere.

Author is a former BBC journalis, now head Public Affairs in India for Hill & Knowlton Strategies. His post-graduate thesis at the Fletcher School of Law & Diplomacy was on “Building a Collaborative Security Architecture in the Indian Ocean Region”

(This article appeared in India Foundation Journal, July-August 2016 issue.)

~ By Jayraj Pandya

“The dream of India as a great nation, which we had seen during the Freedom Struggle, continues to inspire us even today. To some extent, this dream has been realized. Yet, a lot more remains to be accomplished.”¹

• Bharat Ratna Shri Atal Bihari Vajpayee in his last independence day address on 15^th August 2003

In the backdrop of these words and after a passage of ten years, the Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) won a resounding mandate in the General Elections 2014. The BJP achieved a landslide victory by securing 282² seats out of the total 543 seats and in the process, became the first party to win a complete majority in the Lok Sabha after a span of 30 years. The new dispensation at the Centre faced colossal challenges such as an economy in doldrums, restive demographic dividend, foreign policy in tatters and much more. It required a Herculean effort on the part of Prime Minister Narendra Modi led NDA government to bring India out of its troubles, most of which being self-inflicted due to policy paralysis and lack of effective governance. This has put the country back on the trajectory of high growth and prosperity. The effort of this paper is to constructively analyse the progress achieved during the first two years of the NDA Government.

Changing Perceptions, Bursting Myths

Rather than going through the mundane SWOT (Strengths, Weaknesses, Opportunities and Threats) approach in analysing the performance of the Prime Minister Modi-led government, the approach used here is to perform an appraisal on the metrics of ability to positively change perceptions and bursting conventional and age-old myths.

The biggest positive development which has been witnessed under the new regime has been the significant rise in diplomatic capital of the country. Even there, most of this capital has been equity capital and not debt capital i.e. efforts have been made to foster long-term relations with foreign nations and in making them partners in our growth story. Right from the start of this Government’s term by extending invitations to heads of SAARC nations, to operationalising the landmark India-Bangladesh Land-Boundary agreement (LBA) and from rekindling the Indian diaspora with the nation to display of the statesmanlike approach by the Prime Minister in dealing with global leaders and multilateral institutions for best interests of the nation, the country has witnessed an unprecedented global spotlight during the past 24 months of this regime.

On the economic front, the country was battling a baffling quadrangular conundrum comprising of severe policy paralysis, high inflation, the Twin Balance Sheet (TBS) challenge and low and jobless economic growth. Blatant corrupt practices at a mammoth scale, a hallmark of the previous dispensation, led to self-induced policy paralysis stalling big-ticket investment projects in key sectors such as energy, infrastructure and transportation. Under the Pragati (Pro-Active Governance and Timely Implementation) initiative whereby the Prime Minister directly reviews stalled projects- 108 of the 350 Centre-state projects, worth over Rs 3 lakh crore across critical infrastructure sectors like railways, national highways, power and civil aviation, interminably delayed for the past four to 15 years, have been revived.³ The ardent push to electrify each and every village in the country, doubling the speed of creation of highways in the country and several other such silent revolutions marked the resurgence of infrastructure creation in the country.

Despite two consecutive years of drought, the earnest and consistent efforts made by the Government including creating Price Stabilisation Fund (PSF) for preventing volatility in agricultural commodities, restricting imports of pulses, enabling strict action against black marketers⁴ and timely imposition of stock-holding limits of essential commodities⁸ has ensured that the days of double-digit Consumer Price Inflation (CPI) are behind us.

Perhaps the biggest perception changer can be seen in the Rational Investor Ratings Index (RIRI), a tool created in Economic Survey 2014-15 to gauge the investor confidence. As can be seen, India performs well not only in terms of the change of the index but also in terms of the level, which compares favourably to its peers in the BBB investment grade and even its “betters” in the A grade. (India is in the BBB investment category according to Fitch rating agency. A is the category just above it.) ⁵

Expanding the limits for Foreign Direct Investment (FDI) in key areas including insurance and defence sectors, improving ease of doing business in the country, passing key legislations for financial reforms such as the Insolvency and Bankruptcy Law, initiation of Indradhanush program for revival of Public Sector Banks (PSBs)⁶ and a host of other such progressive measures led to India becoming the fastest growing large economy in the world during the year 2015-16⁷ and also the top destination for FDI across the world in 2016⁸.

The biggest myth prevailing in the country- the economically and socially backward classes can only be uplifted through doles and freebies has been debunked with various affirmative actions taken by this Government leading to empowerment of citizens across the board. The cause of social advancement has been championed by the NDA Government through its flagship programs including providing a bank account in each household (Jan-Dhan , more than 22 crore bank accounts opened⁹), providing life and accident insurance to citizens (Jan Suraksha, 12 crore beneficiaries reached¹⁰), crop insurance program (Pradhan Mantri Fasal Bima Yojana), providing incentives for economic upliftment through skill training (Skill India), disbursement of loans to small and micro entrepreneurs (MUDRA, over Rs. 1 lac crore disbursed to over 2.7 crore account holders¹¹) and through creating a conducive culture for start-ups in the country (Start-up India, Stand-up India).

The arduous push to the Direct Benefit Transfer (DBT) program through development of Jan-Dhan, Aadhaar, and Mobile (JAM) Trinity has been a major development in institutionalising a change in framework for provision of subsidies and services to the citizens. The first variety of JAM- PAHAL scheme of transferring LPG subsidies via DBT has been a tremendous success under this regime. As the Economic Survey stated- Based on prices and subsidy levels in 2014- 15, the potential annual fiscal savings of Pahal will be Rs. 12,700 crore in a subsequent Financial Year.¹²

Merely looking at the performance of this Government from the prism of tangible achievements would be a misnomer. The tough stance of the Prime Minister over the conduct of his Council as well as the bureaucracy has ensured that corruption, which became a hallmark of the previous dispensation, is done away with, in his tenure. This dispensation has championed several initiatives with an aim to bring about a change in the very mindsets of the citizens such as Swachh Bharat Mission, improving accessibility for Divyang citizens (Accessible India), digital storage of important documents of citizens (DigiLocker), creating an open platform for connecting with citizens (mygov.in), real-time outreach on social media for grievance redressal and more. This Government has also tried to break conventional mindsets ingrained in the bureaucratic system in the country through far-reaching measures such as real-time tracking of attendance of government officers (attendance.gov.in), direct access to citizens to seek appointments (myvisit.gov.in), allowing self-attestation of documents to prevent harassment of citizens and repealing of over 1100 archaic laws in the country¹³.

The Way Ahead

In the last two years, the NDA Government has been taking giant strides on the path of equitable social, economic and cultural progress but still a lot more remains to be achieved. Just like Bharat Ratna Shri Vajpayee, Prime Minister Modi, in his speech on the completion of 2 years of the Government reiterated his commitment towards the nation by saying-

“Work done by our Government in last 2 years is now an inspiration for us to serve the country even better.”¹⁴

The author is a Research Fellow at India Foundation. The views expressed are his own. 

(This article appeared in India Foundation Journal, May-June 2016 issue.)

References

1.        Prime Minister Shri Atal Bihari Vajpayee’s Independence Day Address, Former Prime Ministers of India- Prime Minister’s Office, 15^th August 2003, New Delhi

Can be accessed at- http://archivepmo.nic.in/abv/speech-details.php?nodeid=9239; last accessed at: 20^th June 2016

2.        Performance of National parties in General Elections 2014, Election Commission of India, New Delhi, 2014

Can be accessed at- http://eci.nic.in/eci_main/archiveofge2014/20%20-%20Performance%20of%20National%20Parties.pdf; last accessed at: 20th June 2016

3.        Off the blocks: PM Narendra Modi’s big push to get stalled Centre-state projects off the ground, India Today, June 9, 2016

Can be accessed at: http://indiatoday.intoday.in/story/narendra-modi-project-pragati/1/687740.html; last accessed at: 20^th June 2016

4. Inflation: LOK SABHA UNSTARRED QUESTION NO. 2448 TO BE ANSWERED ON MARCH 11, 2016; Lok Sabha: Parliament of India, 11^th March 2016

Can be accessed at- http://164.100.47.190/loksabhaquestions/annex/7/AU2448.pdf; last accessed at: 20^th June 2016

5. Economic Outlook, Prospects, and Policy Challenges, Economic Survey of India- Pg. 9, February 2016

Can be accessed at- http://indiabudget.nic.in/es2015-16/echapvol1-01.pdf; last accessed at: 20^th June 2016

6. Indradhanush: Plan for Revamp of Public Sector Banks; Ministry of Finance, August 14, 2015

Can be accessed at: http://financialservices.gov.in/PressnoteIndardhanush.pdf; last accessed at: 20th June 2016

7. GDP: At 7.6%, India’s growth points to fastest growing large economy, Indian Express, 1^st June 2016

Can be accessed at: http://indianexpress.com/article/business/economy/gdp-7-9-percent-its-official-india-is-now-the-fastest-growing-economy-in-the-world/; last accessed at: 20^th June 2016

8. The fDi Report 2016: Global Greenfield investment trends, Financial Times, 2016

Can be accessed at: http://forms.fdiintelligence.com/report2016/files/The_fDi_Report_2016.pdf; last accessed at: 20^th June 2016

9. Progress Report: Pradhan Mantri Jan Dhan Yojana, Ministry of Finance, As on 15^th June 2016

Can be accessed at: http://www.pmjdy.gov.in/account; last accessed at: 20^th June 2016

10. Daily Enrolment for Pradhan Mantri Jan Suraksha Yojana, Ministry of Finance, As on 18^th June 2016

Can be accessed at: http://www.jansuraksha.gov.in/claims-reported.aspx; last accessed at: 20^th June 2016

11. MUDRA Loans: LOK SABHA UNSTARRED QUESTION No. 1584 TO BE ANSWERED ON THE 4th March, 2016, Lok Sabha: Parliament of India, 4^th March 2016

Can be accessed at: http://164.100.47.190/loksabhaquestions/annex/7/AU1584.pdf; last accessed at: 20^th June 2016

12. Spreading JAM across India’s economy; Economic Survey of India- Pg. 57, February 2016

Can be accessed at: http://indiabudget.nic.in/es2015-16/echapvol1-03.pdf; last accessed at: 20^th June 2016

13. Mohan Vishwa, 1159 obsolete laws scrapped by Modi govt; 1,301 junked in previous 64 years, Times of India, 19^th May 2016

Can be accessed at: http://timesofindia.indiatimes.com/india/1159-obsolete-laws-scrapped-by-Modi-govt-1301-junked-in-previous-64-years/articleshow/52333875.cms; last accessed at: 20^th June 2016

14. Text of PM’s address at “Ek Nayi Subah” Event on the completion of 2 Years of the Government; narendramodi.in, 28^th May 2016

Can be accessed at: http://www.narendramodi.in/text-of-pm-s-address-at-ek-nayi-subah-event-on-the-completion-of-2-years-of-the-government-483802, last accessed at: 20^th June 2016

~ By Alok Bansal

The killing of Mullah Mansour, the leader of Taliban on 22^nd May, near AmadWal inside Pakistan’s Balochistan province has had a significant impact on the security situation of the region. It has also worsened the already tenuous relations between Pakistan and the US. This, the first drone attack inside Balochistan, saw Pakistan vociferously protesting against infringement of its sovereignty, as this has expanded the area of ‘unilateral’ US operations within Pakistan. However, as in the case of Osama Bin Laden earlier, Pakistan has yet to come out with any rational explanation for the presence of such elements within its territory. More significantly, this operation has severely strained Afghanistan-Pakistan relations.

The presence of Mullah Mansour inside Pakistan has given credence to what Afghan authorities had always believed that Mansour was in close league with Pakistani authorities. The fact that he had a valid Pakistani passport with visas from Iran indicates that somebody from within the establishment was supporting him. It has also been established that he had travelled to Iran and was coming back. The fact that the leader of one of the most dreaded militant organisation and Amir-ul-Mumineen for jihad being waged by Al Qaeda, was travelling without any protection shows that he never visualised any threat within Pakistan. He took a taxi from the Iran border and travelled over 450 Km in Balochistan where there are numerous security check points on roads to prevent movement of Baloch nationalists, thereby indicating that he feared no threat from security forces.

This affirmation of close links with the establishment in Pakistan coming immediately after heightened Taliban offensive under Mansour, which included attack on Kunduz and other towns, where numerous lives have been lost to Taliban, naturally annoyed Afghanistan. They felt that Pakistan’s government was playing a double role by supporting Taliban, while overtly being a part of the Quadrilateral Coordination Group (QCG) on Afghan peace and reconciliation process, made up of representatives from Afghanistan, Pakistan, China and the United States.

Unlike the previous occasion, when Mullah Omar had died, the Taliban did not waste time and contrary to expectations, named Haibatullah Akhundzadaas the new leader. It was widely believed that either Sirajuddin Haqqani, the leader of Haqqani Network, who has been close to the Pakistani establishment or Mullah Yakoub, the son of the Taliban founder Mullah Omar, would be appointed as the leader, as they were the deputies to Mansour.  Both have been retained as deputies to Akhundzada, as they wield considerable influence within the Taliban. Unlike the previous occasion even Al Qaeda came out quickly in support of Akhundzada. To cement his position and ostensibly to avenge Mansour’s killing, the Taliban carried out some bold attacks in Afghanistan. Merely hours after the new leader was announced, a suicide attack in Kabul on a bus carrying employees of the judiciary department claimed 11 lives and injured 10 others. As many of them were carried by Haqqani network, fingers were pointed towards Pakistan.

The new leader has vowed to continue the fight and accordingly, the Taliban have refused to participate in any talks. However, the Afghans have been pressing Pakistan to bring the Taliban to the negotiating table, as they had promised to do so earlier. The fact that Pakistan has not done so, has aggravated the rift between the two countries and Afghans have started accusing Pakistan of meddling in their affairs by pointing  towards Mansour’s presence on Pak territory. More significantly, just before Mansour’s killing, the Afghan government had warned it would take action against Taliban for not coming to the table and had urged the QCG to show their military role.

Pakistan, unfortunately, did not come out with any rationale for the presence of the Taliban chief on its territory; rather, it tried to deflect attention by talking about repatriating 2.5 million Afghan refugees, which it claims have been living in Pakistan for decades. It stated that the unbridled movement of Afghans into Pakistan had led to instability and needed to be controlled.To further aggravate the situation, it started implementing a new border mechanism from 01 June, whereby it proclaimed that no Afghan would be permitted to cross the border without a valid passport and Visa, thereby creating serious hurdles for families living across the border. It also started fencing its border and building a gate at Torkham in Khyber Agency, the busiest border crossing, which was objected to by Afghanistan stating that Pakistan could not build a gate anywhere on the border, without its consent. Pakistan however, continued to build the gate stating that it was technically 37 metres inside its border and that it was essential for its counterterrorism strategy to check infiltration of militants and terrorists.  The tensions resulted in firing between the forces of two countries, led to the killing of an Afghan soldier and two soldiers of Pakistan Army including a Major, besides causing injuries to many. The funerals of soldiers who died in combat were attended by thousands of mourners in both the countries, clearly indicating the hostile sentiments against each other.

The Afghan Foreign Ministry spokesperson claimed that the security forces had acted to safeguard its territorial integrity and “armed forces are always ready to defend their country and people and to react against any kind of threats”. Simultaneously, a senior Pakistani military official stated that the gate at Torkham would “now be built and at any cost” and the army would retaliate with full force, if anyone tried to create any hindrance. This belligerent stance led to continuation of firing between the two sides for few more days till ceasefire was eventually declared, but tension continued to prevail and troops remain deployed on both sides of the border.  All activities at Torkham were suspended and thousands of vehicles and persons were stranded on both sides. Both sides have summoned each other’s envoy and have lodged protests, but neither is willing to dilute its stance. To diffuse the issue, Sartaj Aziz, the advisor on foreign affairs to the Prime Minister of Pakistan rang up Afghan National Security Adviser (NSA) Hanif Atmar and invited him and the Afghan Foreign Minister Salahuddin Rabbani for talks to resolve the prevailing logjam. In a direct snub to Pakistan, Afghanistan refused to send either its NSA or the foreign minister, but sent a delegation led by its deputy Foreign Minister Hekmat Khalil Karzai.

The talks failed to reach any conclusion, as Pakistan informed the Afghan delegation that Pakistan planned to build four gates at different places along the border, as it considers them to be crucial to the security of both the countries. The Afghan side claimed that the talks were held in an “amicable and friendly atmosphere” but they had raised the issue of “various violations” by Pakistan, which included setting up of posts in Afghan territory and “unprovoked artillery shelling of Afghan villages.” The presidents of the two countries are expected to meet during Shanghai Cooperation Organisation (SCO) meeting.

These developments however, indicate a serious falling out between the two governments, where Afghanistan accuses Pakistan of supporting Taliban and Pakistan accusing Afghanistan of sheltering anti-Pakistan militants. It clearly indicates that having successfully inducted Haqqani network into the top echelons of Taliban, Pakistan clearly sees it as its proxy, which should be allowed to control the levers of power in Kabul. President Ghani, on the other hand after, after placating Pakistan for long, has eventually realised that Islamabad and more significantly, Rawalpindi, are unwilling to stop their support to Taliban. Consequently, Ghani has been scathing in his comments on Pakistan and is making all out diplomatic efforts to isolate Pakistan. His trip to Chabahar was probably a step in that direction. Even the US, after the killing of Mansour had warned Pakistan against terrorist activities in Afghanistan. Pakistan on the other hand, having secured Chinese support, seems to be in no mood to tow the US line.  Afghanistan-Pakistan relations therefore are headed for a prolonged period of turbulence.

The author is Director India Foundation and Adjunct Professor of NDIM.

(This article appeared in India Foundation Journal, May-June 2016 issue.)

~ By Priyang Pandey

MUDRA Bank or Micro Units Development and Refinance Agency Bank is aregulatorand a one stop solution for developing and refinancing the micro-finance institutions (MFIs) and to implement ‘credit guarantee scheme’for micro enterprises in India which according to NSSO survey of 2013 comprises over 5.77 crores business units.

Modi government announced MUDRA in the 2015-2016 Budget for refinancing micro & small-scale industries that is expected to give a big push to MSME sector, which contributes about 90% of the non-farmingjobs in India. Mudra bank was officially launched by the Prime Minister on 8^th April, 2015.

Micro and Small Scale Industry in India

A micro enterprise is an enterprise where investment in equipment or plant and machinery does not exceed Rs 25 lakh; small enterprises are those enterprises where the investment in plant and machinery is more than Rs 25 lakh but does not exceed Rs 5 crores. In India Small and Micro Industrial sector with unorganised sector together provide over 46 crores jobs.This is greater than the organised sector, which provides less than 10% of the total non-farming jobs in India.

The informal sector and employment

Over the years, various surveys conducted by the government as well as industry bodies have found that most of the credit disbursed by the commercial banks goes to organised sector industries, whereas the micro and small industries gets only 4% of its credit needs from Financing Institutions (FIs). These FIs have been setup to help in creating self-employment opportunities by providing easy loan facilities to small and informal units, which are the economic driver of a major chunk of population.

Interestingly though, the corporate sector is considered to be the growth driver of the economy for the last two decades since 1991, with access to almost every possible financing option, tax leverages and other benefits. Yet, this segment is capable of feeding just 2.9 crores households. A study titled ‘India’s better half : the informal sector economy’ by Credit Suisse clearly states that half of India’s GDP and 84% of all non-agricultural work is informal. In fact, theinformal economy in India is much larger than in most Emerging Markets (EMs).

The intuitive habit of drawing macroeconomic conclusions from the corporate feedback (and vice versa) is fraught with risks. After all, only half of India’s GDP and 10% of India’s employment are in the formal sector. Further, only a fraction of the formal sector is listed. To take investments for example, investors intuitively use feedback from large capital goods and construction companies to form a view on India’s investment cycle. This can be misleading since ‘the tail is unlikely to wag the dog’.

Micro Financing in India

Micro Finance is an economic development tool whose objective is to assist the poor to work their way out of poverty. It covers a range of services which is in addition to the provision of credit. These services are savings, insurance, and fund transfers, counselling etc. The microfinance sector has grown rapidly over the past few decades. Banks have also leveraged the channel of Self-Help Group (SHGs) to provide direct credit to group borrowers. The Indian economy largely comprises of micro-units, mostly in manufacturing, trading or service activities, which are ‘self-financed enterprises’. And it is this informal sector which keeps most of the India employed and helps in sustaining economic growth. Interestingly, in the social context, according to the government of India most of these small enterprises are owned by the people belonging to socially and economically Backward Classes.

New Initiative of Financial Inclusion

With the financial inclusion programme ‘Jan DhanYojana’ emerging as a major policy instrument in the country, microfinance has occupied centre stage as a promising channel for extending financial services to unbanked sections of population and to nurture the small and micro entrepreneurial ecosystem. At the same time, practices followed by certain lenders have subjected the sector to greater scrutiny, hence the need for strict regulation.

The government proposed the setting up of the MUDRA Bank and made it responsible for regulating and refinancing all Micro-Finance Institutions (MFIs) which are in business of lending to micro and small business entities engaged in manufacturing, trading and service activities.

As per release of Ministry of Finance, Government of India, the Bank would partner with state level and regional level co-ordinators to provide finance to Last Mile Financer (LMF) of micro and small business entities.

Functions assigned to MUDRA

The MUDRA Bank is primarily responsible for laying down policy guidelines for micro/small enterprise financing business including registration, regulation and accreditation /rating of MFI entities. MUDRA would be laying down responsible financing practices to ward off indebtedness and ensure proper client protection principles and methods of recovery besides development of standardised set of covenants governing last mile lending to micro/small enterprises. It would also promote right technology solutions for the last mile financers.The NITI Aayog also points to India’s continuing challenge to ensure that this economically vibrant group remains engaged and its potential is fully realised. Taking cognisance of this, the most important responsibility that is mandated to MUDRA is to formulate and run a Credit Guarantee Scheme (CGS) for providing guarantees to the loans which are being extended to micro-enterprises and to create a good architecture of Last Mile Credit Delivery to micro businesses under the scheme of PradhanMantri MUDRA Yojana.Under the aegis of the PradhanMantri MUDRA Yojana, MUDRA has already created its initial products/schemes. These interventions have been named ‘Shishu’, ‘Kishor’ and ‘Tarun’ to signify the stage ofinitiation, growth / development and funding needs of the beneficiary micro unit / entrepreneur and also provide a reference point for the next phase of graduation / growth to look forward to:

• Shishu : covering loans up to Rs 50,000/-
• Kishor : covering loans above Rs 50,000/- and up to Rs 5 lakh
• Tarun : covering loans above Rs 5 lakh and up to Rs 10 lakh

It is to be ensured that at least 60% of the credit flows to Shishu Category Units and the balance toKishor and Tarun Categories.

Establishment

MUDRA Bank was created with a corpus sum of Rs 20,000 crores that was allocated from the money available from shortfalls of Priority Sector Lending for creating a Refinance Fund to refinance all types of MFIs and Last Mile Financers. Another corpus of Rs 3,000 crore was provided to MUDRA Bank from the budget to implement Credit Guarantee scheme for ensuring loans to the micro enterprises.

The above measures are not only helping in increasing access of finance to the unbanked but also in bringing down the cost of finance from the Last Mile Financers to the micro/small enterprises, most of which are in the informal sector.

Current Scenario

For financing the small and cottage industries, previous governments from time to time provided infrastructure to support this sector. SIDBI or ‘Small Industries Development Bank of India’ was mandated to provide easy funds to cottage and micro industrial units but the smaller point of presence of the last mile financers did not deliver efficiently. In addition there are many other players in the micro finance sector like SHG (Self Help Groups) Bank Linkage model started by NABARD, Non-Banking Financial Companies and other trusts, societies. Currently, the Existing financing mechanism or the MFIs are primarily dependent on commercial banks for money. Commercial Banks are required to channel 40% of their loans to the ‘priority sector’ which includes agriculture and other small loans, and they redirect money to these MFIs to meet the targets.

The MFIs provides loan at a very high cost as the banks and other refinancing agencies charge12.5% (PLR) interest to these last mile financers and they add an additional spread of 10-11% to meet their operating cost. Consequently, loans extended by these micro units’are priced at around 23%-24%.

Most of these financers extend support to the private limited firms like proprietorship firms; partnership firms and trusts which are considered as a major share of micro industries are deprived for funds.Margin money is also an important concern for these micro units as the existing financing sector requires them to provide for a margin amount of 33%. This forces the borrowing-units to seek funds from local money lenders where the interest ranges from 36% to even 360% andleads to exploitation of these people.

MUDRA Bank is to take over some of the refinancing activities of SIDBI and channel the money in a more focussed way to pave the path of inclusive growth and development and reach out to last downtrodden person – ‘Antyodaya.’.

How it happened

In the budget of 2014, the idea of creating a new financial architecture for providing funds to the micro business units was introduced and to realise it, a committee was constituted. The committee submitted its report in February, 2015 rejecting the idea of creating a separate development and regulatory refinancing bank stating that the Reserve Bank of India had opposed it as a risk prone step.

But the NDA government was convinced that the existing financial system would not fund these micro industrial setups which in reality are the backbone of job creation in our nation. By ignoring the committee report, with the aim of improving the health of the micro and small scale sector, the government went ahead and established the MUDRA Bank. The Finance Minister emphasising in his budget speech that the ‘inclusive growth’ can only be achieved thought he growth of the non-formal sector.

Why MUDRA Bank

Conventional economic wisdom emphasises investment for growth of production or increase in its all-round spectrum by adding capital. This would certainly raise productivity but would not integrate the poor income/ real goods/ services generating activity. If we approach the problem of rural development from the view point of bringing the poor into the income generating activity by making them directly productive, we can make their life meaningful.

The current government focuses on poverty elimination rather than just alleviation which can be made a reality only if the poor are integrated into the national economic framework by involving them in their own ventures on a continuous basis. To nurture the micro and small entrepreneurial ecosystem it was the need of the hour to provide one stop solution to the problems relating to development and financing of these micro units.

Expected Outcome

As a Bank to be established by legislation under a new law, MUDRA Bank will refinance, register, regulate all small business financing institutions (MFIs), it will also partner with regional coordinators to enable them to boost up the Last Mile Financers monetarily. LMFs play a crucial role in micro financing and including them into the regulatory system will prove out to be potential game changer. On one hand LMF will utilise its local and regional knowledge, and of the borrowers potential and on the other hand the regulations will bind them with the framework set by the MUDRA Bank which will include registration, client protection to recovery options and it would helpcurb the exploitations by harsh money lenders in rural India.

Challenges in front of MUDRA Bank

To implement all these policies, a faster pace of implementation and execution is required. Paralysis in implementation of policies as well as awareness among the people running micro industrial units especially in rural areas are some of the major challenges confrontingMUDRA.Fortunately, the Modi government is working with a remarkable capacity which can be seen by the progress report of recently launched target based scheme for financial inclusion ‘Jan DhanYojana’ where the government included 665.26 lakh more people into the financial ambit of banking sector till January2015.

Point of Presence of LMFs in rural areas is a major hurdle in reaching out to the remotest part of the country and use of post offices as LMFs might turn into a landmark in financial inclusion of these micro units.

One Year old MUDRA

MUDRA turned one this April and as per the data provided on the website it has already disbursed more than one lakh crores rupees to nearly 24 lakh micro units. Not only have the existing micro units benefittedbut under the ‘Shishu’ category, many newcomers have availed of the concessional finance.

MUDRA- A Success

In his budget speech of 2016, finance minister ArunJaitley declared that the target for the last fiscal had been achieved. Till April 2016, a total of 106,52,867 loan applications worth Rs. 2437596 Crores had been sanctioned. The establishment of MUDRA would not only help in increasing access of finance to the hitherto unbanked but also bring down the cost of finance to the micro/small enterprises, most of which are in the informal sector.Further, the approach goes beyond credit only approach and offers a credit – plus solution for these myriad micro enterprises spread across the country.

On 4^th April, 2016 Prime Minister Modi launched Standup India in line with MUDRA to fund the unfunded especially for the people from SC/ST and other deprived communities. This is in line with the vision of MUDRA, which is “to be an integrated financial and support services provider par excellence benchmarked with global best practices and standards for the bottom of the pyramid universe for their comprehensive economic and social development.”

The author is Research Fellow at India Foundation. The views expressed are his own. 

(This article appeared in India Foundation Journal, May-June 2016 issue.)