India goes nuts ‘competing’ with China
M.K. Bhadrakumar
Hopefully, the first-ever visit by Bangladesh Prime Minister Sheikh Hasina to India during the tenure of the present government will not get deferred for the third time. Foreign Secretary met Hasina in Dhaka and choreographed an April visit. But the water-sharing agreement remains elusive. It is difficult to see how or why Mamata Bannerjee would oblige PM Narendra Modi.
Meanwhile, there are other sticking points too. According to reports, Dhaka is reluctant to sign a defence agreement and prefers a non-committal Memorandum of Understanding that would be symbolic and provide the photo-op, but won’t assume obligations. The proposed agreement was a key talking point for Defence Minister Manohar Parrikar when he visited Dhaka in December. Delhi held out a seductive $500 million credit line attached to the agreement. But Bangladesh army is reasoning that when India prefers high-quality stuff from Russian or western vendors, why should Bangladesh settle for the ‘Make in India’ stuff?
Bangladesh probably wants to cherry pick. Bangladesh is not Nepal or Myanmar. It is an ambitious country and will look for advantages. The Chinese equipment is cheap and easy to use and comes with no strings attached. The real issue could be that Bangladesh army is reluctant to become dependent on India.
Equally, Reuters has reported that China’s state-run Zenhua Oil recently signed a preliminary deal worth $2 billion with Chevron to buy natural gas fields in Bangladesh. These are the Jalalabad, Bibiyana and Moulavi Bazar gas fields, located in the north-eastern regions bordering Meghalaya and Assam.
Zenhua happens to be a unit of China’s defence industry conglomerate Norinco and has the backing of the state-backed investment vehicle China Reforms Holding Corp. Of course, Bangladesh holds the right of first refusal on assets and could block the Zenhua-Chevron deal. But will it? The timeline is June. Meanwhile, in May Hasina is planning to attend the One Belt One Road (OBOR) summit that China is hosting. Bangladesh has already announced its interest in formally joining the OBOR initiative.
India is countering by firing all eight cylinders. The High Commissioner in Dhaka was quoted by local press as saying that “around $11 billion of investments from India in the power, LNG and port sectors in Bangladesh are in the pipeline… India now allows duty-free benefits to all Bangladeshi goods, except for cigarette and alcohol items…There is no limit to what you can get from India because we have a lot of surplus energy. We can sell you electricity any time… you can take 1,000 megawatt, 2,000 megawatt and even 10,000 megawatt…”
Things don’t add up. $11 billion? That’s approximately Rs. 71,500 crores. Isn’t it incredible that the budget allocated for the Navodaya Vidyalaya Samiti in 2015-16 to run 589 schools with over 2 lakh students was a mere Rs. 1905 crores? Or that the Kendriya Vidyalaya Sanghatan, which runs 1,099 schools with over 11.7 lakh children, got a budget allocation of Rs. 3190 crore? That is, a mere 7 percent of the investments India is planning to make in Bangladesh!
To be sure, China is driving our government nuts. The paranoia over “competition” with China (and Pakistan) has so far prompted Modi government to offer $1 billion to Mongolia, $2 billion to Afghanistan, $1 billion to Nepal, $2 billion to Bangladesh and so on. It makes no sense that Reliance Power and Adani Group cannot be persuaded to work in India’s power sector instead of the GOI providing finance to the tune of $5 billion at highly concessional terms to “incentivise” them to undertake projects in Bangladesh.
Bangladesh will never become a Chinese colony. Our paranoia is not only unwarranted, it is downright stupid. New thinking is needed. The accent should be on regional stability instead of chasing “influence”. At any rate, look at the level of our “influence” on Sri Lanka today. The Delhi elites hark back to Buddhism to establish affinities with Colombo, while Sri Lankan Tamils abandoned by India resort to satyagraha to get justice.
“Influence” comes with respect — and respect cannot be bought off the shelf. China earned respect when its phenomenal rise drew world attention. If India too can grow at double digits for a decade or two, it will become a role model and it will earn respect. Conversely, a country with 500 million people living under the poverty line doesn’t instill admiration or command respect. The current priorities of foreign policy are quite clear — facilitate a favourable external environment in which the development agenda can be advanced. Without doubt, India is a beneficiary of peace and stability in the region.
China and Bangladesh signed loan agreements worth $20 billion, and trade and investment deals worth $13.6 billion, on the sidelines of President Xi Jinping’s visit to Dhaka last October. Why should India try to match it? China apparently has enormous surplus capital to invest abroad. We don’t have such capacity. Period. On the other hand, our priority should be to attract Chinese investments to India. Yet, all of Chinese investments in India for the entire 2016 worked out to just over $1 billion only.
About author: MK Bhadrakumar served as a career diplomat in the Indian Foreign Service for over 29 years, with postings including India’s ambassador to Uzbekistan (1995-1998) and to Turkey (1998-2001). He writes the “Indian Punchline” blog and has written regularly for the Asia Times since 2001.
http://blogs.rediff.com/mkbhadrakumar/2017/03/02/india-goes-nuts-competing-with-china/
M.K. Bhadrakumar
Hopefully, the first-ever visit by Bangladesh Prime Minister Sheikh Hasina to India during the tenure of the present government will not get deferred for the third time. Foreign Secretary met Hasina in Dhaka and choreographed an April visit. But the water-sharing agreement remains elusive. It is difficult to see how or why Mamata Bannerjee would oblige PM Narendra Modi.
Meanwhile, there are other sticking points too. According to reports, Dhaka is reluctant to sign a defence agreement and prefers a non-committal Memorandum of Understanding that would be symbolic and provide the photo-op, but won’t assume obligations. The proposed agreement was a key talking point for Defence Minister Manohar Parrikar when he visited Dhaka in December. Delhi held out a seductive $500 million credit line attached to the agreement. But Bangladesh army is reasoning that when India prefers high-quality stuff from Russian or western vendors, why should Bangladesh settle for the ‘Make in India’ stuff?
Bangladesh probably wants to cherry pick. Bangladesh is not Nepal or Myanmar. It is an ambitious country and will look for advantages. The Chinese equipment is cheap and easy to use and comes with no strings attached. The real issue could be that Bangladesh army is reluctant to become dependent on India.
Equally, Reuters has reported that China’s state-run Zenhua Oil recently signed a preliminary deal worth $2 billion with Chevron to buy natural gas fields in Bangladesh. These are the Jalalabad, Bibiyana and Moulavi Bazar gas fields, located in the north-eastern regions bordering Meghalaya and Assam.
Zenhua happens to be a unit of China’s defence industry conglomerate Norinco and has the backing of the state-backed investment vehicle China Reforms Holding Corp. Of course, Bangladesh holds the right of first refusal on assets and could block the Zenhua-Chevron deal. But will it? The timeline is June. Meanwhile, in May Hasina is planning to attend the One Belt One Road (OBOR) summit that China is hosting. Bangladesh has already announced its interest in formally joining the OBOR initiative.
India is countering by firing all eight cylinders. The High Commissioner in Dhaka was quoted by local press as saying that “around $11 billion of investments from India in the power, LNG and port sectors in Bangladesh are in the pipeline… India now allows duty-free benefits to all Bangladeshi goods, except for cigarette and alcohol items…There is no limit to what you can get from India because we have a lot of surplus energy. We can sell you electricity any time… you can take 1,000 megawatt, 2,000 megawatt and even 10,000 megawatt…”
Things don’t add up. $11 billion? That’s approximately Rs. 71,500 crores. Isn’t it incredible that the budget allocated for the Navodaya Vidyalaya Samiti in 2015-16 to run 589 schools with over 2 lakh students was a mere Rs. 1905 crores? Or that the Kendriya Vidyalaya Sanghatan, which runs 1,099 schools with over 11.7 lakh children, got a budget allocation of Rs. 3190 crore? That is, a mere 7 percent of the investments India is planning to make in Bangladesh!
To be sure, China is driving our government nuts. The paranoia over “competition” with China (and Pakistan) has so far prompted Modi government to offer $1 billion to Mongolia, $2 billion to Afghanistan, $1 billion to Nepal, $2 billion to Bangladesh and so on. It makes no sense that Reliance Power and Adani Group cannot be persuaded to work in India’s power sector instead of the GOI providing finance to the tune of $5 billion at highly concessional terms to “incentivise” them to undertake projects in Bangladesh.
Bangladesh will never become a Chinese colony. Our paranoia is not only unwarranted, it is downright stupid. New thinking is needed. The accent should be on regional stability instead of chasing “influence”. At any rate, look at the level of our “influence” on Sri Lanka today. The Delhi elites hark back to Buddhism to establish affinities with Colombo, while Sri Lankan Tamils abandoned by India resort to satyagraha to get justice.
“Influence” comes with respect — and respect cannot be bought off the shelf. China earned respect when its phenomenal rise drew world attention. If India too can grow at double digits for a decade or two, it will become a role model and it will earn respect. Conversely, a country with 500 million people living under the poverty line doesn’t instill admiration or command respect. The current priorities of foreign policy are quite clear — facilitate a favourable external environment in which the development agenda can be advanced. Without doubt, India is a beneficiary of peace and stability in the region.
China and Bangladesh signed loan agreements worth $20 billion, and trade and investment deals worth $13.6 billion, on the sidelines of President Xi Jinping’s visit to Dhaka last October. Why should India try to match it? China apparently has enormous surplus capital to invest abroad. We don’t have such capacity. Period. On the other hand, our priority should be to attract Chinese investments to India. Yet, all of Chinese investments in India for the entire 2016 worked out to just over $1 billion only.
About author: MK Bhadrakumar served as a career diplomat in the Indian Foreign Service for over 29 years, with postings including India’s ambassador to Uzbekistan (1995-1998) and to Turkey (1998-2001). He writes the “Indian Punchline” blog and has written regularly for the Asia Times since 2001.
http://blogs.rediff.com/mkbhadrakumar/2017/03/02/india-goes-nuts-competing-with-china/
Best friends and neighbors for a reason.
