India Needs an Aggressive China Insurance Policy

What should India’s conduct with China look like? This question is on the minds of a lot of people in India’s foreign policy circles. I currently have a two-part answer to this question:

Part 1: Assuming that yogakshema for all Indians is defined as the national interest, India’s asks from China would be: peace on the borders and investments in the Indian economy. From a Chinese perspective, these asks are extremely beneficial too. Peace on the Indian border allows them to concentrate their efforts towards challenging the US in the South China Sea. And India is perhaps the only market with the scale and the stability to promise returns on Chinese capital currently flowing to weaker economies.

Part 2: Part 1 is insufficient because China’s recent movements – in Maldives, Nepal, and Doklam – are indicative of its tendency to eschew a mutually beneficial path and pick an openly hostile front instead. To prevent this switch, India needs to invest in I call an Aggressive China Insurance Policy. The motive of this policy is simple: should Xi Jinping’s China get aggressive with India, India should have readily available capacity to inflict significant pain to China in return. The insurance “premium” for this policy includes a variety of measures:

  1. Establish contacts with the key members of World Uyghur Congress and other such organisations.
  2. Shift the focus of “Act East/Look East” to one country — Vietnam.
  3. Offer Trump deals that can deepen the US-India engagement.
  4. Sponsor studies that puncture the “Chinese Leaders Do No Wrong” narrative.

This two-part policy can help India modulate its relationship with China.

Why Did the FATA-KP Merger Happen Now?

Yesterday, the Pakistani President Mamnoon Hussain signed a legislation that merged FATA with Khyber Pakhtunkhwa. At least notionally, the people of FATA now have the same rights as all other Pakistanis do. In a sense, the decolonisation of FATA began yesterday.

This is a landmark moment for Pakistan and the wider region. But the aspect of this decision that interests me most is: why now? What caused the Overton Window to shift now, making this policy change became feasible?

The FATA region has been critical to the Pakistani military-jihadi complex’s Afghanistan policy. The Haqqani Network and other assorted groups have used this region as a launchpad for their operations inside Afghanistan. And given that the military-jihadi complex (MJC) is at the helm of affairs in Pakistan, the FATA-KP merger indicates a change — tactical or strategic — in the MJC’s policy.

A strategic policy change implies that the MJC is seriously reconsidering its approach of using terrorism to achieve strategic gains. It further means that reeling under self-inflicted losses, the MJC is now thinking of reversing its policy stance towards Afghanistan and perhaps India. Though this sounds like great news, it is also just too good to be true. An indicator that supports this sceptical assessment is this: the MJC has merely replaced the colonial-era Frontier Crimes Regulation (FCR) with an Interim Regulation Order — old wine in a new bottle. ANP leader Afrasiab Khattak had this to say regarding the merger:

It is more likely that the merger is a tactical response that the MJC was forced to concede. If so, what were the forces that enabled this concession? The success of the snowballing Pashtun Tahafuz Movement (PTM) certainly seems to be the immediate trigger. Abolition of FCR was one of the major planks of this movement and the Pakistani Army has at least temporarily taken the wind out of PTM’s sails by agreeing to the FATA-KP merger. This is what a Pakistani analyst had to say regarding the PTM’s role in the merger:

the pressure created by the Pashtun Tahafuz Movement (PTM) cannot be ignored. The PTM has criticized the military for its heavy-handed approach in terms of dealing with ethnic Pashtuns living in Pakistan’s tribal areas. The movement has attracted strong support internationally and successfully built a narrative that accuses the military’s heavy presence as a reason for the region’s ill-treatment. While the military may have been planning to ensure FATA’s regulation, the pressure generated by PTM has only expedited the process.

But then again, if you have followed Pakistani politics long enough, you know that backing down is not the MJC’s style. If PTM were the only factor, they would have been managed through disappearances and even assassinations by the garden variety of namaloom afraads at the disposal of the MJC. So clearly, there’s some other factor at play here.

My speculation is that pressure by the US government had some role to play here. In fact, an allegation to this effect was made by Jamiat Ulema-i-Islam (JUI-F) chief Maulana Fazlur Rehman. There might be some grain of truth in this. A test for this hypothesis could be the economic gains Pakistan receives from the US (and IMF) in return for this ‘historic’ step. In recent months, Pakistan’s external debt situation has only worsened and the MJC seems primed to take a detour in its foreign policy in order to meet urgent economic needs.

What do you think made the MJC change its FATA policy?

 

Kowtowing to Chinese Maritime Power Is Not a Good Strategy

I came across an essay titled China is Not Alone in Adding to the Indian Ocean Woes in the Economic & Political Weekly’s 28th April edition.

The article makes three points regarding maritime power in the Indian Ocean region. Each of the three points deserve closer scrutiny and hence this post.

The first point is that maritime power rests not just on managing the maximum number of ships and submarines but also on the control over maritime finance and particularly on maritime services. In the author’s words:

War vessels and merchantmen are the two most visible elements of power at sea. However, the marine service industry, the most important arm of maritime power generally remains obscured. The marine service sector regulates and organises the diverse maritime cluster. This silent force operates in the realm of marine manufacturing, marine legal services, engineering, and technology, and supports the charter, insurance, sale, and purchase of maritime assets. It also determines freight and cargo rates. It is this sector that helped Britain sustain its empire for another 75 years, after the US had become the centre of international manufacturing by the 1870s.

This is a point well made. Given that India’s current approach does not factor in the significance of maritime service industry, effectiveness of India’s exercise of maritime power will continue to be limited in the short-term.

The second point is that India should not solely be focused on China’s maritime expansion in the Indian Ocean:

We are afraid of the Chinese empire-in-the-making while being oblivious to the dangers that the existing American empire poses to the Indian Ocean region. We are so bothered about the Chinese developing a base in Djibouti, but have been oblivious of the fact that France and the US already have a base over there… We do not know how Chinese hegemony will work in the future, but we know the exploitative and heinous character of the French and the British Empires. The question is, why are we not as afraid of the West as we are of the Chinese?

From a realist perspective, this argument makes sense. Increase in power of the other states affects India’s ability to achieve its own objectives. The law of the jungle is indeed the nature of international relations but even so — and this is what the article misses — a bigger animal eats the smaller animal only when it is hungry. And as things stand, there’s only one state with the hunger for expansion in Indian Ocean. So, India must swing on this issue with the US and other powers to restrict the most imminent threat. This collaboration is also necessary to address the first point — building a maritime ecosystem (including a maritime services industry) of its own.

The third point the article makes is:

We cannot move ahead on the presumption that the Chinese empire will be bad. Who knows, it may be a little better and more peaceful than the wretched, iniquitous world that Anglo-American capital has created. The Indian navalists must be a little more judicious and not allow the Indian Navy to be used as a projectile to counter China.

Now this argument is far removed from reality. There is enough evidence to suggest that a Sinocentric world order will not align with India’s quest for yogakshema — peace and prosperity for all Indians. For a start, look at the way China has alienated — simultaneously and purposively — a new generation of peoples in all of its neighbouring countries. Then look at how the Chinese Communist Party has imposed one language on a diverse set of its own peoples. And finally, just glance at its social credit system to see the Chinese vision for the future.

Of course, the US conduct on the liberal international order that it carried forward from Europe has hardly been untainted. But the failings of the US cannot not be used to give a free pass to China.The reason is that irrespective of what the US does, India is fundamentally aligned with the norm of a liberal international order, for its own national interests. We must question the US when it deviates from this norm. But in a Sinocentric world, this norm itself will cease to exist.

This is what I wrote in Pragati a few days ago:

Legitimacy for the Chinese way of reordering the world is constrained by an essentially hierarchical Chinese worldview — one that divides the world between ‘civilisation’ and ‘non-civilisation’ depending on the extent of sinicisation a region has gone through. This makes the idea of a Pax Sinica a repulsive proposition to most states, let alone illegitimate. So, even if China were to become the most powerful state in the world, it is unlikely that it will become the most authoritative actor.

 

 

Why has the US Policy Orthodoxy on Iran Sustained for Four Decades?

On 8th May, the US President announced that the US was withdrawing from the Iran nuclear deal. The US would also be reimposing the sanctions on Iran that were in place prior to the deal. Essentially, we are back to a hostile Iran-US relationship after a short break where a change seemed likely. Now, this hostile policy orthodoxy in the US vis-a-vis Iran has sustained itself for nearly 4 decades. And one of the foreign policy mysteries for me has been: why is that the case?

After all, Iran is one of the most “normal” states in West Asia. It is also a regional power and now there is even some alignment between US and Iranian interests in Afghanistan and over ISIS. And yet, the foreign policy of the US towards Iran hasn’t change for nearly forty years. What are the possible reasons? I asked this question to my colleagues. I’m summarising some of their responses and my own views on them.

The oft-repeated reason given is the Iran hostage crisis of 1979. It is argued that this highly televised, 444-day imbroglio is the reason behind the perception of Iran as a ‘rogue state’ in the US. I doubt if that is the case. Even though this crisis might well be the reason that set the current policy orthodoxy in motion, it does not sufficiently explain why the orthodoxy would continue for four decades. In fact, in the same year the US embassy in Islamabad was burnt. Two Americans died as a result. And yet, there was no break in the US-Pakistan relationship. So, it doesn’t seem logical that another contemporary incident of a similar nature, one in which no American hostage was killed, can create and sustain a policy orthodoxy for four decades. 

The second reason given is that the hatred towards Iran is sustained by Iran’s own acts of hostility towards the US. Indeed, Iran has often taken up the gauntlet on various occasions. But again, this reason doesn’t sufficiently explain why the policy orthodoxy did not change even after Iran demonstrated its willingness to change as part of the P5+1 negotiations. The North Korean example shows that the US that a change in relationship terms is possible even with a state belonging to the ‘axis of evil’.

The third reason given is Trump. That’s an easy one to contest though. Long before Trump came into the picture, this policy orthodoxy was still going strong.

The fourth reason give is “follow the money”. The argument is that pro-Israel and pro-Saudi lobbies in the US ensure that there is no foreign policy change in the US on the Iran issue. There is some weight in this argument and it could help explain the longevity of the policy orthodoxy. If that is case, the emergent hypothesis is that the policy change is incumbent on the Iran-Saudi Arabia-Israel triangle. Unless Iran can patch up with at least one of these two West Asian powers, the US will keep the heat on. 

In any case, this question needs methodical research. I think it’s just one of those questions in foreign policy which is not raised enough. Someone should do a study of the kind Nicolas Blarel has done to explain the orthodoxy and change in the India-Israel relationship. Or perhaps, I have been ignorant. If you know of a study that tackles this question systematically, please point me to it!

 

 

Light-touch Regulation for Social Media

There’s suddenly a lot of talk about how governments need to regulate social media. From a public policy perspective, the immediate cause underlying this policy change is an egregious case of misuse of social media. Policy changes that arise out of crises can often go overboard in the policy instrument deployed.

Using the simple threefold classification of carrots, sticks, and sermons, it means that governments are more likely to use sticks rather than carrots or sermons in such cases. Under the garb of user protection, governments will use the ‘need for regulating the conniving social media‘ narrative to suppress dissent. So, assuming that at least a few governments will choose to intervene, which instrument should be used?

I would advocate for a sermons approach: the government can instruct social media companies to carry a user login banner which explicitly states that

the opinions on your timeline are not be verified and may not be reflective of the truth. User discretion is advised.

Think of the banner that appeared in the beginning of the World Wrestling Entertainment telecasts:

fights are performed by professionals solely for the purpose of entertainment. Any attempt by our fans to emulate our Superstars physicality is extremely dangerous and irresponsible.

The result was that there was no ambiguity in the minds of the viewer that WWE was an entertainment show and not a gladiator fight. Perhaps, a regulation of this kind has some lessons that are relevant now.

A Broken Legislature

PRS Legislative Research has some damning stats out on the recently concluded Budget Session of the Parliament.

Key lowlights are:

  1. Least amount of time spent by both Houses on debating the Budget since 2000
  2. 100 percent of the demand for grants passed without discussion
  3. 1% of productive time spent on legislative business in Lok Sabha; 6% in Rajya Sabha
  4. Poorest performance of Question Hour in Lok Sabha since 2014

Basically, no work got done in the entire Budget Session. And we have an entire ministry for Parliamentary Affairs! In a well-functioning democracy, heads should have rolled for this incompetence.

Pashtun Protection Movement: A Radically Networked Society in Action

If you have been trawling the internet in search of reliable news and opinion about the Pashtun Tahaffuz Movement (PTM), there’s some good news. Beena Sarwar has an excellent backgrounder in Scroll.in. 

What caught my attention was the social media’s role in mobilising widespread support given that there is a blanket censure  of PTM by all major media houses in Pakistan. Sarwar describes this role as follows:

Their (PTM’s) demand for constitutional rights directly challenging Pakistan’s powerful security establishment was blatantly censored from the mainstream media. The pattern has continued with subsequent rallies.

But in this digital age, news of the Swat demonstration could not be suppressed. The social media activists or citizen journalists who trended the hashtag #PashtunLongMarch2Swat included gender studies lecturer Tooba Syed from Islamabad. Making the four-hour journey to Swat by road, she movingly documented her experiences on Twitter.

Without social media, “the movement would not be possible”, said one of its leaders, 34-year-old lawyer Mohsin Dawar, a former student activist associated with Left politics.

The rapid rise of social media in Pakistan (17% internet penetration, growing fast) and mobile phone subscribers (over 70%) makes television coverage (73%) less crucial than before. But censorship still violates the people’s right to know, as a statement endorsed by over 100 journalists in April emphasises. [Scroll.in, 6 May 2018]

So, the PTM is a textbook example of what we call a Radically Networked Society (RNS) — a web of hyper connected individuals, possessing an identity (imagined or real), and motivated by a common immediate cause.

In PTM’s case, the Pashtun ethnicity provided the common identity, Naqeebullah Mehsud’s cold blooded murder by the Karachi Police became the immediate cause, and Twitter, WhatsApp, Signal, and Facebook enabled the movement to scale. 

The oppressive and all-powerful Pakistani State has ensured that media houses have no reportage of the protests. And yet, it has been unsuccessful in stopping the spread of information via the RNS route. This typifies the nature of information flows — information propagates rapidly in networked societies, at a pace too fast for hierarchical states to arrest.

From past instances of RNS mobilisations, we know that governments tend to use excessive force in desperation if extended internet shutdowns do not work. And Pakistan Army has a long history of using force on its non-Pakistani citizens. Unfortunately, looks like this is likely to be the next step. Watch out for the Karachi rally that the PTM has called for on May 13th.

 

GST Council Registers a Success

GST Council deferred the decision on levying a cess on sugar on May 4th. A union cess is problematic because the revenue earned by levying it does not form a part of the ‘divisible pool’ of resources, meaning that no part of it goes to state governments.

The trick by the union government is not new. A 2016 EPW article had made a note of this trend:

It is observed that over the years there has been a proliferation of cess and surcharges in union tax revenues. As these levies are not shareable with the states, this has resulted in effective reduction in the divisible pool of resources available for transfers to states. The share of cess and surcharge in the gross tax revenues of the union government has been rising over the years. It increased from 9.43% in 2011–12 to 16.7% in 2015–16 (RE).

 

Quite naturally, state finance ministers opposed the introduction of the 5 percent cess on sugar that was being pushed by the union government. However, this proposal was put on hold after a meeting of the GST Council. The fact that the state governments had a say over the union government’s levy of a cess and were able to block it indicates that the GST Council is on the right track. In a limited sense, it is emerging as a powerful institution for intergovernmental bargaining. This is a good sign for making cooperative federalism a reality.

 

The Lure of the Government Job

The Hindustan Times carried a piece on April 22nd which said that the Indian Railways is set to carry out the world’s largest recruitment drive, one that will fill ninety thousand vacancies from a pool of 2.5 crore applicants.

What struck me most was this seemingly innocuous quote by one of the applicants:

I am anxious for a job and a regular income.

This rather simple statement fits into a hypothesis we have developed over the last few weeks: employment can affect income in two orthogonal dimensions – through income stimulation and through income stabilisation. Income stimulation happens purely because the budget line of an unemployed individual shifts to the right once she becomes an employee. By income smoothening or stabilisation, we mean that the employee is reasonably certain that she will receive her employment wage over the next few payment cycles. For example, a job like the now famous Pakoda seller demonstrates an income stimulation effect but lacks income stability. A software engineers’s job at a large firm by contrast does better on both income stabilisation and income stimulation.

Now, the simple observation by the railway job aspirant shows that the lure of a government job is that for less well-paid jobs, a government service leads to income stabilisation as well as income stimulation which is not the case with a private job for the same skill level. At least that is how the perception is. And this is essentially the lure of a government job. What this means is that for any meaningful rise in employment in India, private sector jobs will have to compete with government jobs on both these dimensions.

No sermons, no carrots, only sticks

The Reserve Bank of India on April 6th prohibited banks from:

dealing in Virtual Currencies or from providing services for facilitating any person or entity in dealing with or settling Virtual Currencies.

This is not strictly a ban on people from mining bitcoins or possessing them. Perhaps, it’s not even possible for RBI to enforce that ban given the decentralised nature of cryptocurrencies. Nevertheless, prohibiting banks from dealing with any cryptocurrency is symptomatic of how quickly governments resort to blunt policy instruments in India.

Carrots, Sticks, and Sermons has a wonderful classification of policy instruments. It argues that any government primarily has three policy instruments available to it: information (moral suasion, transfer of knowledge, communication of reasoned argument, advice, and persuasion etc), economic instruments (grants, subsidies, charges, fees etc), and regulation (absolute bans, prohibition with exemptions, obligation to notify etc).

Now, which of these three policy instruments should governments choose? The book has this to say:

All other things being equal, in most cultures at least, the use of coercive power is more alienating to those subject to it than is the use of economic power, and the use of economic power is more alienating than the use of information and exhortation. Or, to put it the other way around, exhortation and information tend to generate more commitment than economic instruments, and economic instruments more than regulatory instruments.

The book says that even politically, it is rewarding if these three instruments are applied in a sequence:

politicians have a strong tendency to respond to policy issues (any issue) by moving successively from the least coercive governing instrument to the most coercive. The idea is that over time a policy problem is tackled in three different ways: first by the provision of information such as uttering a broad statement of intent, subsequently by the application of selective incentives, and lastly by the establishment of regulations accompanied by the threat of sanction. The underlying notion is that in solving social problems the authorities employ instruments of increasing strength in successive stages.

But is this order followed in India?

It would take a thorough study to investigate this. But if the regularity of prohibitions is taken as an indicator, it appears that even if this order is adhered to, the predilection in Indian policymakers is to pick the coercive option fairly quickly. And this says a lot about India. It can be taken as a proxy for how liberal political philosophy is stillborn in India. A liberal society would default to a minimal constraint principle – cause as less trouble to the populace as possible. Policy instruments are ends in themselves as they determine the style of policymaking in a polity. So, a high number of bans and prohibitions indicates that at the margin, greater government control is the default in India. Seen through this lens, the RBI note does not surprise.

Reservations don’t affect bureaucratic performance

Bhavnani and Lee have a counterintuitive insight.

the performance of bureaucrats hired through affirmative action is similar to those who were not, is striking within the context of the polemical debate on affirmative action, in which strong claims are often made for the positive or negative effects of affirmative action. We find that reservations have neither led to hiring of officers unable to perform their jobs or led to a dramatic change in institutional output, at least for one important government program.

They use the provisioning of MGNREGA at the district level as a proxy for bureaucratic performance. Their major finding is that MGNREGA provisioning does not worsen in districts where the IAS officer is a beneficiary of reservation.

Two possibilities arise if this result is reflective of the reality. One, UPSC exam performance does not reflect aptitude for governance. Or two, getting into the IAS is so competitive that despite reservations, efficiency of those with lower ranks is not compromised.

 

India’s China Reset ≠ China’s India Reset

Global Times carried an op-ed on 12th April applauding India’s reported China Reset policy.

With regard to their ties in the past three years, many Indian media outlets and scholars believe New Delhi has gone astray with its China policy. Following a misjudgment of China’s development and the international landscape, the Indian government chose to confront China and consequently damaged India’s own development.

In typical Global Times style, the op-ed didn’t miss a chance to take a dig at India:

The rise of China actually constitutes an opportunity for India instead of posing a threat. China’s GDP is nearly five times that of India, so the two are at different levels of economic development. New Delhi can hardly expect to exert powerful leverage against China. The primary priority for India is mulling over how to take a ride on China’s development and realize its dream of national rejuvenation.

The bluster aside, what should be clear to us is that a China Reset in New Delhi does not imply an India Reset in Beijing. In fact, China’s recent foreign policy conduct shows that the reverse is likely to be true. With every Indian acquiescence to China’s aggression, China will escalate provocations.

Ask Philippines, Indonesia, and Vietnam, if you are still in doubt.