A Growing Political Party in Pakistan

A cricket champion predicts victory in the upcoming election.

The captain of Pakistan’s only World Cup-winning cricket team is predicting another victory — this time for the leadership of his country.

Imran Khan enjoyed a 20-year career with the Pakistan national team, culminating in the country’s only World Cup victory in 1992. After retiring from cricket, Khan entered politics, founding the Pakistan Tehreek-e-Insaf (PTI) party in 1996. The party’s stated goal is to eliminate corruption from politics and purports to be a real alternative to the established political parties. By focusing on populist rhetoric of removing “criminal” politicians who avoid paying taxes, in combination with his high profile as a national sports hero, Khan has been successful at sparking the interest of average citizens in a way perhaps no other Pakistani politician ever has.

In protest of the corruption they see in the Pakistan political system, Khan’s PTI party boycotted the 2008 general election. Though at the time the party was too small to affect the outcome of the election, public support for the party has doubled in the past year to 20 percent. Khan’s huge political rallies in Lahore and Karachi in late 2011 attracted the kind of cheering supporters usually found at a sporting event.

In a February 2012 article in The Economist, Khan denied having bussed in people or used Pakistan’s Inter-Services Intelligence spy agency to build the crowds at these rallies. Though it is unusual for Pakistan, Khan said that so many ordinary people came forward with donations, the rallies actually produced a profit.

But Khan has two major challenges if his party is to sweep to victory as he predicts.

First, with six major political parties and dozens of minor parties, the party with the most votes will almost certainly have to form a coalition with other parties in order to form the government. While Khan’s party would naturally align with Islamist conservatives who share the same anti-American sentiment and view American military involvement in Pakistan as a violation of sovereignty, other potential allies are not as clear.

His second major challenge has been pointed out by some of those potential allies. Former Pakistan president Nawaz Sharif, leader of the Pakistan Muslim League, said that while Khan’s popularity has made him a “force to be reckoned with”, the PTI lacks the experience necessary to turn that popularity into electoral gains. Critics say Khan is prone to taking the popular position in a given situation, which leads to the perception that he has inconsistent views. Though he has called himself a liberal, he also appeared on television denouncing “liberal scum”.

He also presents unrealistically simple solutions for complex problems. For example, his plan for the contested territory of Kashmir is simply for India to surrender it to Pakistan. Critics point out this is no plan at all and would therefore lead to little change in the region. Likewise, Khan has pledged to eliminate corruption in the government within 90 days of taking power, simply by setting a good example and appointing an ethical cabinet. But such an approach fails to address the longstanding, entrenched, systemic corruption his party has criticized in politics, the bureaucracy, and the military in Pakistan.

Despite his enormous popularity, Khan may discover if he is to lead a coalition government, the degree of compromise required to gain consensus could look a lot like politics as usual.


China’s Influence in Nepal

China strengthens its grip over its neighbor.

Under a media blackout, Chinese Premier Wen Jiabao quietly arrived in the Nepalese capital of Kathmandu with $135 million in aid for “infrastructure and security” in mid-January, further tightening China’s stranglehold on its landlocked southern neighbor.

When news of the visit emerged, reports suggested as many as eight agreements had been signed between the two countries, though details were scarce. Police and military forces locked down the capital during the premier’s visit and the Press Trust of India (PTI) reported “a large number” of Tibetan refugees were detained in order to bar them from protesting.

“The visit has proven a milestone in the development of friendly ties between the two neighbouring countries,” Deputy Prime Minister and Foreign Minister Narayan Kaji Shrestha told reporters.

The two sides agreed to strengthen bilateral relations and expand economic cooperation, PTI reported.

Beijing will finance many of Nepal’s infrastructure projects and will fund the modernization of the country’s police force. Also comprising part of the $135 million was a $20 million one-time grant to Nepal and a series of annual grants to assist economic and technical cooperation.

The agreement to modernize policing, which includes building a joint armed police force college, positions China to exert even greater control over the 18,000 Tibetan refugees who fled to Nepal after the violent suppression of protests in the Tibetan capital of Lhasa in 2008.

According to a March article in The Economist, the Chinese have established a series of concentric “security rings’ around Lhasa, with the outermost running through Nepal. The article says Chinese operatives are working under the guise of non-governmental organizations, language institutes, and small businesses on both sides of the border in an attempt to quell infiltration by pro-Tibetan forces from India, which they refer to as the “Dalai Lama clique”.

However, China’s efforts at exerting control over Tibetan refugees still face some barriers. Under a long-standing agreement of the United Nations High Commissioner for Refugees, new Tibetan refugees are transported to India; and, though the Chinese request certain individuals from Kathmandu, refugees are rarely sent back to Tibet.

But the Nepalese government refuses to issue refugee documents to long-term Tibetan residents of Nepal, denying them access to employment, education, and even driver’s licenses. The U.S. government has offered to bring 5,000 Tibetan refugees to America, but the Nepal government has not accepted.

Report Released on Gujarat Massacres

Effects are still being felt ten years after the massacres.

A report detailing an extensive investigation into the 2002 Gujarat massacres was presented to a magistrate in India in March, ten years after the brutal murder of at least 1,000 Muslims by angry mobs comprised of the region’s Hindu majority.

The Supreme Court of India commissioned a Special Investigations Team (SIT) to examine the Gulberg Society riots in Ahmedebad, and the team was ordered to turn over all related documents and evidence about the investigation as part of a court proceeding initiated by Zakia Jafr, widow of Congress MP Ehsan Jaffr, who was killed in the attacks.

The massacre began after a dispute at a Gohdra train station on February 27, 2002. A mob of Muslims attacked a train carrying hundreds of Hindu activists returning from the holy city of Ayodhya. They set fire to the cars and 58 people were burned alive. Though at the time, Gujarat’s Chief Minister Narendra Modi called the attacks a planned act of terrorism, it wasn’t until 2011 that the police investigation yielded any charges. Ninety people were charged with planning and setting the fire, of which 31 were convicted, 11 of them sentenced to death.

In retaliation for the train station fire, members of the Hindu majority descended on the Muslim area of Ahmedebad known as the Gulberg Society, a walled community of 29 middle-class bungalows and apartments. The inhabitants were slaughtered, some chopped to pieces, and the whole compound was set on fire.

The official death toll in the Gujarat massacres was 1,000 though unofficial estimates suggest the actual figure could be twice that.

Muslims make up just nine percent of Gujarat’s population, and those who survived the massacre were left with a devastated community. Rioters destroyed 5,000 homes, 500 places of worship, 10,000 shops, and displaced tens of thousands of people.

In her court case, Ms. Jafr accused 64 senior politicians, bureaucrats, and police officers of committing crimes during the riots. Efforts to stop the rioters took so long, there were allegations the authorities sympathized with the rioters and were complicit in the violence. The Economist recently reported that last year a policeman alleged that Gujarat’s Chief Minister Narendra Modi himself declared that Hindus should be allowed to “vent their anger”.

The legal system has also been slow to prosecute those responsible for the riots and killings. A decade later, only two cases have resulted in convictions, though neither can be credited to the judiciary and prosecutors in Gujarat. One conviction happened in the neighbouring state of Maharashtra and the other came only after the Supreme Court ordered a retrial after initial acquittals.

Though the SIT report is 20,000 pages long, investigators found no “prosecutable” evidence against Gujarat Chief Minister Narendra Modi. There is therefore little chance Modi will even be charged with wrongdoing in his handling of the Gujarat massacres, but the issue will plague this Prime Minister-hopeful in his aspirations for greater things in his political career.

Much of the credit for Gujarat being India’s fastest-growing state goes to Modi’s efficient leadership. He is seen as one of the most charismatic figures in the Bharatiya Janata Party, which represents India’s Hindu-nationalist movement. He has populist appeal beyond Gujarat, but will certainly face questions about the massacre if he is to seek higher office.

Accusations of his complicity in the massacre may make him unpalatable in the international community. Most notably, the United States declined a tourist visa to Modi in 2005 and again in 2008 because of his alleged abetting of human rights violations during the massacre. Despite his ambition to become India’s next Prime Minister, Narendra Modi may never be accepted as a world leader as long as the perception exists that he has blood on his hands.

Seven Billion lay claim World Citizenship

If Thomas Robert Malthus were alive today, he would see his economic theory surpassing those of modern economists. Today planet earth is home to seven billion people. Humanity has reached a new milestone. By the year 2050, the world population will reach nine billion. English scholar Malthus (1766-1834) popularized the economic theory that the increase of population is necessarily limited by the means of subsistence. “The power of population is indefinitely greater than the power of earth to produce subsistence.”

As we welcome the seven-billionth global inhabitant, we also acknowledge the challenges to accommodate a burgeoning population: depletion of resources, scarcity of food and water, the daunting task of waste management, and our overcrowded cities and villages. Humanity’s total demand is unsustainable. We are now utilizing planet earth’s regenerative resources 50 percent faster than they can renew. The question is, what will come next?

A large portion of people in the world do not have enough resources to secure even the most basic needs. The suffering is intolerable. It affects the rest of humanity—most visibly through conflict and instability. According to the most recent statistics, planet earth can reasonably support about five billion people, yet we are two billion in excess. The world population currently consumes commodities and natural resources at a rate of roughly 1.5-times that of earth’s regenerative capacity.

Since the 1970s, human consumption has been in “ecological overshoot” with annual demand on resources exceeding what the earth can regenerate in 365 days. It now takes our planet one year and six months to regenerate what we use in one year.

Reduction in individual consumption can be achieved technologically by encouraging efficiently-built, compact cities where non-car transport options are more viable than personal vehicles. Other options include cradle-to-cradle industrial approaches, renewable energy sources, and smart grids. Technological innovations can increase the efficiency of resource use: video conferencing instead of travel, cellular phones rather than resource-expensive landlines, and energy-efficient electronic devises in place of paper.

Underlying any action, there are many non-coercive and effective strategies that should be considered to reduce and eventually reverse population growth. A slow reduction in population may generate few resource gains in the short term, but it will lead to a cumulative decline in bio-capacity deficits in the long term. Population growth can most effectively be discouraged through voluntary measures such as information about and access to family planning and female education. Successfully implemented, these strategies of decreased population growth can significantly increase human well-being through longer life spans, greater education opportunities, stable lifestyles, and reduced potential for violence.

We, the world citizens, must decide what kind of future we want. Progress and quality of life are not dependent on year-to-year growth in per capita income alone, nor do we need an excess supply of goods to satisfy our needs. The short-term goals of our economy, such as maximizing profits and accumulating capital, are major obstacles to sustainable development. We should return to a more decentralized economy and reduce world trade in light of its environmental impact and energy costs.

We must ask whether our species has the right to reproduce to such an extent that we may reach a population of 11 or 12 billion by the end of the century, laying claim to every square meter of our earth, and restricting the habitats and well-being of all other life to an ever increasing degree.

We should not strive to place all aspects of our lives under the dictates of a purely competitive economic system. Without common principles of global governance, sustainability cannot be achieved. Making justice and fairness a reality for all is not only a moral and ethical imperative, but also the most important means of securing world peace in the long term.

Our Inaugural Pledge

Our Inaugural Pledge

In a moving world, it is an audacious task to present news and views with brilliant apercus.

Since this is a defining moment for us, we must adapt tools and methods to condense and prepare a balanced interpretation of world affairs. We do not have a magic wand or a crystal ball that serves us in understanding the past and anticipating the future. We can only stick to our policy line central to global and human security. From this perspective we will cover a wide range of topics, such as politics, economics, religion, the environment, natural resources, and human rights.

Our goal is to identify major tendencies, achievements, and fallouts in geographical, technological, demographical, and defense matters. The Global Intelligence commits to publish news stories with a sense of future that spurs discussion among decision makers on international issues. All information is open to question, and all concerns have more than one side. To that end, we believe that asking difficult questions can lead to the betterment of human life. To implement this ambitious vision, we ask for our readers’ enthusiasm and cooperation.

Our hope is that the New Year 2012 will bring peace and prosperity for all.

Probir Kumar Sarkar

Why Good Fences make Bad Neighbors

The United States and Canada are moving Beyond the Border, but not for neighborly reasons.

An 1876 drawing of the burning White House , now stored at the Library of Congress in the United States.

The prospect of an enemy invading the United States and setting fire to the White House seems impossible, but some may be surprised to learn that it has already happened. The enemy was not fundamentalist terrorists or a rogue state masquerading as a terrorist organization or even one of the formidable opponents of the two World Wars.The enemy was those unaccountably polite Canadians who marched into Washington with muskets and brought the U.S. to its knees long before it became the most powerful nation on Earth.

This year marks the 200th anniversary of the War of 1812, the oft-forgotten conflict in which the U.S. invaded the North American British territories and lost. The war actually took place before Canada was even a country. It grew out of the tensions that existed then between the United Kingdom and the newly independent United States.

When considering modern world problems such as 9/11 and the armed conflicts that have followed in Iraq and Afghanistan, the War of 1812 may seem ancient and irrelevant. But at its crux, the dispute 200 years ago was about a powerful nation, the British Empire, imposing its will on a less-powerful nation, the United States.

Today, there is no question that the United States has become the more powerful nation. There is now little risk of American troops invading Canada with muskets, but the American economy has permeated its Canadian neighbour so thoroughly that the long-standing, successful trade relationship could almost be viewed as a form of neo-colonial dependence.

The Canadian reliance on their neighbours South of the border has created a unique love/hate relationship between them and the Americans. At just one-tenth the population of the United States, smooth relations are an economic necessity for Canada, but the two countries have had to work through some major differences. They have had the longest-running trade dispute in history; they’ve disagreed on the rights to the Northwest Passage in the Arctic; they’ve butted heads on their environmental commitments under the Kyoto Protocol; and a series of increasingly restrictive U.S. regulations over the past few years has greatly limited the ability of Canadians to move people and products across the border.

In the last decade, the Western Hemisphere Travel Initiative (WHTI), a piece of American anti-terrorism legislation, has placed more restrictions on border traffic than at any time since the two countries were at war 200 years ago.

Only in December of 2011 with the announcement of the Beyond the Border Initiative do Canada and the United States seem to be once again working together to remove some of the barriers created in the decade since the 9/11 attacks. But, as with most of the major disputes between the two countries over the years, Washington moved from its position only when doing so would be in the best interest of its nation and not out of a commitment to neighbourly relations.


Because Canada and the United States have the world’s largest trading partnership, perhaps it should be no surprise they also have one of the largest and longest-standing trade disputes.

In many ways, the softwood lumber dispute highlights the difference in economic philosophies between the two countries. In Canada, it is generally acceptable for the government to play a role in the economy, whereas the U.S. has historically preferred a freer market. The softwood lumber dispute, which has been rearing its head for over 30 years, highlights this friction of philosophies.

In Canada, most timber is found on land owned by the provincial government. Loggers pay the government a stumpage fee to enter the land and harvest the wood. The dollar value of the stumpage fee is set by government regulation and is not subject to a competitive bidding process as it is in the United States. As a result, the Americans see the lower Canadian stumpage fee as a way of subsidizing the lumber industry and creating an unfair competitive advantage between their industries.

The U.S. lumber industry petitioned the U.S. Department of Commerce in 1982 to impose a countervailing duty on Canadian softwood lumber to offset what they perceived as the unfair advantage Canadian loggers were afforded through regulated stumpage fees. However, under U.S. trade law, a countervailing duty can only be imposed if the subsidy is being given to a specific industry. The Department of Commerce accepted the Canadian view that lumber is used in so many different industries, there could be no easy basis on which to impose a countervailing duty.

The U.S. lumber industry brought forward another petition on the same issue in 1986, and this time the Department of Commerce decided to impose a 15 percent countervailing duty. This prompted negotiations between the two countries who eventually entered into an agreement for a tariff.

The following year, the countries entered into the Canada-U.S. Free Trade Agreement. Four years later, the Canadians notified the Americans they were withdrawing from their earlier agreement on the softwood lumber tariff and challenged the issue before a new trade panel constituted under the free trade agreement. The panel ruled the U.S. Department of Commerce had no grounds for imposing the 15 percent tariff in 1986.

The decision was met with significant controversy however. Not only did the panel’s three Canadians and two Americans vote along national lines, the Americans also alleged two of the Canadian panelists had conflicts of interest. An appeal of the panel’s decision again ruled in favour of the Canadians, but the ruling highlighted the many problems with the dispute resolution processes under the new free trade agreement.

In 1996, the countries reached a five-year agreement under which Canadian lumber exports to the U.S. were limited to 14.7 billion board feet per year. When the agreement expired in 2001, however, the dispute flared up again and the countries could not agree on terms to extend the deal.

In the absence of an agreement, the U.S. lumber industry in 2001 again petitioned the Department of Commerce to impose a countervailing duty on Canadian softwood lumber. The Department imposed a host of new charges and applied a range of duties to specific Canadian lumber companies exporting to the U.S.

This ruling set off a decade of appeals to the World Trade Organization, North American Free Trade Agreement panels, and the International Trade Commission. While many internal U.S. trade authorities ruled in favor of the U.S. position, most decisions by international trade bodies favored the Canadian position. When a NAFTA Chapter 19 commission ultimately decided in favor of the Canadians, then-Prime Minister Paul Martin called on the Americans to honor the free trade agreement between friendly nations by respecting the decision.

Further exacerbating the philosophical divide on subsidies, the Canadian government announced it would give $20 million to the Canadian lumber industry to help pay the legal fees associated with these many challenges.

Rather than accept the NAFTA decision, the U.S. filed a court case, challenging the constitutional validity of the dispute resolution provisions of the North America Free Trade Agreement.

After further negotiations, and after a further NAFTA ruling held that the perceived Canadian government subsidy had little value to the Canadian lumber industry, Canada and the U.S. finally reached a new softwood lumber agreement in September 2006. Canada would receive $4 billion of the $5.3 billion it had lost in American penalties to that point, with no tariffs in the future.

Canada was slow to implement new export regulations, however, and under the agreement’s dispute resolution provisions, the U.S. applied to the London Court of International Arbitration (LCIA) for a resolution of the outstanding issues. The private arbitration panel ruled in favor of the U.S. and imposed fines on particular Canadian sawmills who had not satisfied reporting requirements.

The softwood lumber dispute is representative of the relationship between these two neighbors of vastly different GDP in two important ways. First, as was noted above, government involvement in the economy in Canada is not seen as an attack on the free market the way it often is in the United States.

Secondly, it illustrates each country’s approach to international relations. Canada appeals for an internationally-sanctioned resolution while the Americans often just argue their own position. Aside from the decision of the LCIA in the final implementation of the agreed upon regulations, various NAFTA panels, International Trade Commission, and international arbitration all ruled in Canada’s favor throughout the dispute. But when you’re dealing with the most powerful nation in the world, an international decision in your favour merely earns you the right to negotiate.


In environmental matters, the issues surrounding the Kyoto Protocol illustrate the American influence on Canada’s international relationships and commitments.

The United Nations Framework Convention on Climate Change established the Kyoto Protocol as a strategy to fight global warming through commitments to lower greenhouse gas emissions. Annex I countries, which included Canada, agreed to lower their greenhouse gas emissions by 5.2 percent from the baseline 1990 levels by the expiry of the international agreement in 2012.

Canada ratified the Kyoto Protocol in 2002 before it came into force in 2005. Though polls estimated 70 percent of Canadians supported the government’s commitment to the Kyoto objectives, the initiative was met with great resistance from the opposition conservative party, from the provincial government of oil-rich Alberta, and from some segments of the Canadian economy.

Canadian business owners were concerned that the cost of compliance with the reduction in emissions would put them at a severe disadvantage to their American counterparts.

Why? Because, of the 191 countries who signed onto the treaty in December 1997 in Kyoto, the United States became the only country not to ratify the protocol in its own domestic law. By the time the agreement came into force in 2005, the United States had made it clear it had no intention of living up to the commitments called for in the Kyoto Protocol.

This meant American manufacturers did not face the financial and technological burden of finding ways to produce their products to meet greenhouse gas emission reduction standards. When it became clear to Canadians that the Americans were not going to live up to the Protocol’s commitments, their government decided not to develop the legislative and regulatory framework required to enforce its greenhouse gas reduction commitments domestically.

By 2006, Canadian greenhouse gas emissions had actually increased 27 percent over the 1990 baseline levels. The same year, the ruling Liberals, who had signed onto the agreement, were ousted from power by the Conservatives, who had always opposed it.

In February 2009, shortly after taking office, U.S. President Barack Obama met with Canadian Prime Minister Stephen Harper in Ottawa and the two reached an agreement to work bilaterally on environmental issues, touching on everything from carbon-capture technology to the Alberta tar sands.

By this time, it seemed implicit that Canada was choosing to work with the U.S. on environmental issues instead of enforcing the Kyoto standards. The inaction on Kyoto continued until finally, in December 2011, the Canadian government officially announced it would not be part of the second Kyoto Protocol, which will seek commitments beyond 2012.

Again, the explanation by Canadian officials is steeped in polite diplomacy, but the point is, if the U.S. is not going to participate in Kyoto, then Kyoto is also not the answer for reducing greenhouse gas emissions for Canadians.

Canadian Environment Minister Peter Kent said at a climate conference in December in Durban, South Africa, “We believe that ultimately a new agreement that includes all of the world’s major emitters (of greenhouse gases) in both the developing and the developed world is the only way to materially reduce annual mega-tonnage to the point we can work to prevent global warming hitting or exceeding two degrees.”

Working with the Americans, the Canadians have instead developed a new domestic greenhouse gas reduction strategy. New mandatory emissions targets for Canadian industry will come into effect this year, using 2006 emissions as a baseline—emission levels much higher than the 1990 baseline of the Kyoto Protocol.

Canada’s failure to live up to its commitments under the Kyoto Protocol is a direct result of the U.S. decision not to ratify the agreement. The relationship between the Canadian and American economy is a complex dependency. It’s not merely a situation where the more powerful Americans hold leverage in trade between the two countries. Canadian industry must present itself to the world as indistinguishable from its American counterpart because if the Canadians put themselves at a slight disadvantage—even if it is for as noble a goal as protecting the environment—they know they can’t compete against American trade.


The Northwest Passage is central to another contested issue between Canada and the United States. It arrises out of an issue of whether the Northwest Passage is in Canadian or international waters. The Northwest Passage is a sea route around the top of North America, through the Arctic Ocean, connecting the Atlantic and Pacific Oceans.

While most other seafaring nations, including the United States, claim they should be able to pass freely through the Northwest Passage because it is in international waters, the Canadian government has long contended that because passage is gained by navigating an archipelago of northern Canadian islands, the waters are clearly under Canadian jurisdiction.

Eventually, the U.S. took the position that, though the Northwest Passage is technically in Canadian territory, it should be regarded as an international strait with free passage for all, as with other straits around the world.

The Canadians have always claimed sovereignty over the waters surrounding their northern islands—taking the position that the right to institute and enforce regulations on passage through the area is the best way to avoid unnecessary spills and environmental catastrophe.

As climate change has been reducing the arctic ice pack for decades, the issue has become increasingly important. With less ice, especially in the summer, the channels can accommodate larger ships. With free access, American companies could move their supertankers through the passage, creating a more cost-effective way to connect shipping lanes on either seaboard.

The dispute first flared up in 1969 when the American oil tanker Manhattan navigated through the strait without permission. The issue came to a head in 1985 when a U.S. Coast Guard icebreaker Polar Sea passed unannounced through the waters, travelling from Greenland to Alaska. When confronted by the Canadian Coast Guard, the ship’s crew permitted an inspection, and the Canadians allowed passage, but the incident sparked outrage on both sides of the border. The Americans wanted to be able to travel unimpeded without asking permission, and the Canadians wanted to be able to enforce the sovereignty of their own borders.

The incident led to Canada issuing a declaration reaffirming its jurisdiction over the Northwest Passage, but the U.S. refused to acknowledge the declaration. In 1988, the two countries eventually signed an Arctic cooperation agreement, reaching the compromise that American Coast Guard ships would not be permitted access without permission.

The understanding seemed to be working until U.S. nuclear submarines were suspected of having passed through Canadian waters without permission on their way to research missions in the Arctic Ocean as reported in Canada’s National Post newspaper in December 2005.

Tensions once again flared. In response to the allegations, the U.S. ambassador to Canada, David Wilkins, restated the American position that its ships are free to pass through international waters.

Then-newly-elected Canadian Prime Minister Stephen Harper publicly announced Canada would develop a plan to enforce its sovereignty in the Arctic. The Canadian military announced it would no longer call the area the Northwest Passage and would instead refer to it as Canadian Internal Waters. The Canadians followed up by announcing the construction of a new deep-water port on Baffin Island.

In making the announcement, Prime Minister Harper was unequivocal about Canadian intentions.

“Canada has a choice when it comes to defending our sovereignty over the Arctic,” he said. “We either use it or lose it. And make no mistake, this Government intends to use it. Because Canada’s Arctic is central to our national identity as a northern nation. It is part of our history. And it represents the tremendous potential of our future.”

The Canadian plan also called for six to eight new patrol ships, at a cost of $3.1 billion.

Uncharacteristically, Americans seemed to have had little response to this tough talk from Canadians. Surprisingly, a former U.S. ambassador, Paul Cellucci, publicly supported the Canadian position in the dispute.

A Canadian Parliamentary research paper dug a bit deeper into the American response and concluded that in a post-9/11 world, American support for Canadian sovereignty in the Arctic serves American interests as much as Canadian interests.

“With regard to the United States’ legal position, however, there have been some suggestions that U.S. concerns with continental security since the terrorist attacks of 11 September 2001 could dampen its assertions that Canada’s Arctic waters constitute an international strait. Accordingly, Canada might perhaps manage relations with the United States over the Northwest Passage by controlling the passage ‘as a way of securing the North American perimeter,’” the paper said.

It seems the Americans have realized that by insisting the Northwest Passage should be an international strait with unimpeded access for all, they would not only be opening access for themselves but also for the rest of the world. In a time when security is at the forefront of the American psyche, the U.S. will acquiesce to Canadian sovereignty only because, for the time being, it is in their best interest as well.


After the 9/11 terrorist attacks, the United States imposed a series of increasingly restrictive regulations that effectively relegated Canada to the same status as any other foreign country.

On January 23, 2007, the United States began requiring Canadians travelling into the country by air to present a passport. On June 1, 2009, the requirement was extended to Canadians entering the country by land or by sea. At the time the law came into effect, only 54 percent of Canadians had a passport. According to the Montreal Gazette, Canadian officials were processing 22,000 passport requests per day in the weeks leading up to the June 1 deadline.

The new laws were part of the Western Hemisphere Travel Initiative (WHTI), an anti-terrorism initiative of the U.S. Department of Homeland Security and Department of State. Prior to the WHTI, U.S. policy exempted Canadians entering the country from any point in the Western Hemisphere other than Cuba from the Visa and Passport requirements of the U.S. Immigration and Nationality Act.

A 2006 research paper prepared for Canada’s Library of Parliament in advance of the initial changes in 2007 approached the analysis with the expected Canadian politeness, highlighting the benefits claimed by Americans before enumerating the many costs for the Canadian government and its travellers:

The WHTI aims to strengthen U.S. national security through increased border security, while simultaneously expediting the movements of frequent travellers (including those who reside in border communities). These potential benefits should be considered alongside the potential costs of the initiative, including:

  • costs of implementation, including design of passport alternatives, training of border personnel, etc.;
  • costs to travellers—in terms of time and money—associated with obtaining or renewing passports (or acceptable alternatives), which were not previously required to cross the Canada-U.S. border; and
  • negative economic impacts resulting from foregone cross-border tourism, trade, and commerce if the new documentation requirements discourage travellers and businesses from crossing the Canada-U.S. border.

In addition, while it is envisioned that the WHTI will expedite border crossings for frequent and low-risk travellers, some critics believe that the new documentation requirements may create border congestion, at least in the short term. Any increases in border congestion would have cost implications—in terms of time and money—for travellers and businesses such as manufacturers, importers and exporters, as well as environmental and health costs.

In submissions to U.S. authorities in the consultation stage, the Canadian government suggested that backlogs at the border could create new security vulnerabilities where significant quantities of goods at rest could themselves become the target of terrorist tampering. Canadian officials also noted the environmental impacts that would come with idling vehicles stuck waiting to cross the border.

The WHTI also requires Americans re-entering the U.S. to produce a passport proving their American citizenship. With only 30 percent of Americans already carrying passports, however, the expected result was fewer Americans entering Canada to engage in cross-border shopping.

The 2006 paper cited a Conference Board of Canada report that estimated both the number of American travellers to Canada and the amount of money spent in Canada from cross-border shopping would decrease in the first three years of phasing in WHTI requirements from 2005-2008. The report estimated that cumulative losses would be “about 6.6 million person-trips and nearly $1.63 billion in travel receipts” over the initial three-year period, which did not include the border crossings lost on account of the requirement of passports for land border crossings implemented in 2009.

In addition, in October of 2011, the decision was adopted by the American government to institute a $5.50 border-crossing levy on Canadians. It was not made for reasons of homeland security but as a means of raising revenue. Facing a $1-trillion deficit, the U.S. government expects to collect $110 million from the fees.

While the fees are being levied on Canadians for the first time, the change actually came about by eliminating a long-standing exemption for a fee already on the books. Originally, the exemption existed for travellers from Canada, Mexico, and the Caribbean.

“Raising taxes at the border just raises costs on consumers,” Canada’s International Trade Minister Ed Fast said in a statement after the change was announced. “Canadian officials have raised concerns about the removal of this exemption at the highest level. We will continue to raise Canada’s concerns with U.S. lawmakers.”

Canadian Prime Minister Stephen Harper spoke publicly against the move, saying, “We want to ensure trade and travel between our two countries is easier, not more difficult, and we don’t need additional taxes on that kind of economic activity.”

The October, 2011 announcement of the new levy is even more unusual in retrospect, considering the two countries jointly announced the new Beyond the Border initiative in December—a deal that promises to remove barriers between the two countries and re-focus efforts on cooperation.


Canada-U.S. Border crossing in Surrey, B.C., 2008.

Beyond the Border is the latest development in Canada-U.S. relations. When President Barack Obama and Prime Minister Stephen Harper announced in December, 2011 they had reached a new agreement to increase cooperation on security issues and reduce trade barriers, Harper placed the deal in its historical context.

“These agreements represent the most significant step forward in Canada-U.S. cooperation since the North American Free Trade Agreement,” Harper said in a statement.

The new deal creates a link between trade and security issues. In simple terms, Canada agrees to share more information about travellers it allows to enter North America, and the United States agrees to eliminate some of the red tape that has complicated and slowed trade between the two countries for the past decade.

The Canadians acknowledge that to a large extent their fortunes and their security are tied to their much larger southern neighbour.

“What threatens the security and well-being of the United States threatens the security and well-being of Canada,” Harper said during the announcement in Washington.

Some of the more practical changes travelers should experience include not having to clear baggage at U.S. airports if it has already been cleared in Canada and faster border crossings with more dedicated lanes for commercial vehicles and with posted wait times at border crossings. In addition to sharing more information, Canada will also adopt two U.S. screening measures over the next four years—an electronic travel authorization for travelers who don’t need visas and a new system that will provide an alert about unacceptable passengers before they board a plane.

By 2014, the countries agree to share biometric information of people from outside Canada and the United States to strengthen screening and reduce identity fraud. They have agreed to more integrated border and law enforcement efforts, including two-way radio communication between guards on each side of the border. And, perhaps most significantly, they will also coordinate response plans in the event of chemical, nuclear or biological emergencies.

The deal includes clear goals and the dates by which the changes are to take effect. The first pilot projects under the deal will begin in April of this year, with benchmarks for some of the initiatives set over the next four years.

Canadian officials estimate the new coordinated regulations could save them $16 billion annually while Canadian business groups say their savings will be closer to $30 billion annually.

The agreement to share more information with the Americans has been met with some resistance in Canada, however, which has a regime of privacy laws to protect against the sharing of citizens’ personal information, even between departments of the Canadian government.

Canada’s privacy commissioner, Jennifer Stoddard, said her office will closely monitor the new initiatives to ensure Canadian privacy legislation is not violated.

“Overall, we must note that the mere fact that the initiatives proposed will result in unprecedented information sharing requires vigilance from a privacy standpoint. Consequently, as the various initiatives unfold, we will be monitoring developments very closely,” she said in a statement to the Huffington Post in December.


As the 200th anniversary of the War of 1812 approaches, Canada and the United States are emerging from a decade in which access to the world’s largest land border was more restricted than at any time in the two centuries since the nations were at war.

Just as the powerful British Empire pressured and cajoled the colonial Americans at the start of the 19th century, we see that in many disputes with Canada, America is now the powerful empire. Whether regarding international trade disputes, the environment, border issues, or matters of Canadian sovereignty in the North, the Americans have consistently trumpeted the merits of their own position even when opinion in the international community is squarely against them. In the case of Northwest Passage and border security issues, Americans have deviated from their position only when partnership with Canadians is also of benefit to America.

The U.S. has shown over the past decade that poorly thought-out fences make bad neighbours, but its recent willingness to move “Beyond the Border” is not a result of a renewed neighbourly interest in its relationship with Canada. For a country with a $1 trillion annual deficit, it’s an act of self-preservation to reach out to its largest trading partner and to try to re-open commercial channels that have been congested for over a decade in the name of security.

President Obama is hoping for another Canadian invasion—but this time one of trade. The U.S. wants its northern neighbours to come politely pouring over the border and stoke the fire of the American economy.

China’s Expansion Strategy Frightens Neighbors

China has so far been peacefully expanding its global military presence to match its image as a rising super power.

Varyag, under tow in Instanbul, en route to China in 2001.

Sometimes, a country’s military might needs to fit with its political and economic prowess. With a huge amount of cash at hand and having influence in the world’s economy and politics, China is asserting its position on the world stage in order to achieve this goal.

Flexing its military muscle in the Indian Ocean, the South China Sea, and beyond, China has been exerting its newly-acquired image as a super power with the second highest GDP in the world. The Chinese are desperately looking for opportunities that give them a strategic advantage or foothold anywhere in the globe.

Beijing’s expansionist behavior in South Asia has been noticed by defense experts. Recently, China has been intensifying the development of its strategic assets in the area, beginning with building the Karakoram highway, a high altitude strategic road that borders China, India, and Pakistan. They have both built and taken charge of sea ports, roadways, and strategic infrastructure in Sri Lanka, Bangladesh, Pakistan, and Myanmar. China is moving to establish strategic and trade partnership with each of them. China is showing a special interest in all of India’s neighbors—perhaps in a move to contain the second most populated country and next emerging super power in its own backyard.

Eying China’s new moves in the South China Sea and in the Indian Ocean, the American military has revived its presence in Australia with the aim of deploying 2,500 troops, signaling that the United States intends to counterbalance a rising China. Prioritizing the United States’ leadership role in the Asia-Pacific region, President Barak Obama and Prime Minister Julia Gillard of Australia reached many agreements during the U.S. president’s visit to that country in November of 2011.

New Delhi is also closely monitoring the growing Chinese presence in its neighborhood. India is particularly concerned with the “String of pearls”—a chain of deepwater ports built with Chinese aid along the Indian Ocean.

In fact, China’s expansionist behavior has long been evident in the acquisition of naval facilities along crucial choke points in the India ocean, which serve both China’s strategic and economic interests.

Strategically, Beijing is placing more emphasis on the Indian Ocean to improve its access to the trade lines therein, to counterbalance India, and to break through the encirclement it perceives being orchestrated by the United States and its allies in the Asia-Pacific region.

Myanmar’s deep-water port of Kyaukpyu is China’s southwest gateway to land trade. Myanmar sits in a strategic corridor between China and the Indian Ocean. This location is becoming increasingly vital as China tries to diversify its energy supply routes from the Middle East and become less dependent on the Strait of Malacca, which is dominated by the U.S Navy and where ships are vulnerable to piracy.

Developments of late last year corroborate further the fact that the Chinese are desperate to go global. China’s Ministry of National Defense announced that Beijing was considering using a port on the main island of Mahe off the east coast of Africa for naval purposes in response to an offer from Seychelles, a former French and British colonial possession. China is certainly calculating the stretegic benefits that Seychelles provides, being far more convenient to ports along the Gulf of Aden and the Arabian Sea. The Indian Prime Minister, Manmohan Singh reacted to this development as saying, India doesn’t see anything “wrong” with China setting up a military base in Seychelles since this appears to be part of Beijing’s efforts to combat piracy in the Indian Ocean region. The island nation’s value to China is similar to that of Diego Garcia Island in the Indian Ocean that was first controlled by the British and now by the Americans.

Meanwhile, in another new report last December, the Deputy Chief of General Staff of the People’s Liberation Army, General Ma Xiaotian, met the Sri Lanka high officials in Colombo to discuss opening a base in the island nation off the coast of the Indian Ocean.

According to Indian media reports, in July of last year, a Chinese ship was mapping the Indian Ocean for crucial bathymetric data. Laboratories onboard the ship were designed to collect data on the currents of the Indian Ocean, the temperature at various depths, and other crucial information like underwater obstructions and obstacles. Bathymetric data is required for submarine and carrier based operations. Information about ocean currents is needed if torpedoes are to be used.

Immediately after detection, an Indian Navy ship was sent. The Chinese ship moved towards Sri Lanka and docked at Colombo. India did not take any punitive action since the Chinese ship remained in international waters. Inquiries by Indian security agencies revealed that the ship had as many as 22 laboratories onboard.

China is also looking to expand across its land borders as well. To tackle restive Islamic terrorism in its province of Xinjiang, China wants to develop a township near along its border with Pakistan where anti-Chinese terrorists operate. The Pakistani province of Khyber-Pukhtunkhwa abuts the non-Han, Chinese province of Xinjiang, which is home to ethnic Uighur Islamic separatists. With the People’s Liberation Army (PLA) of China getting a foothold in the tribal area of Pakistan, China reasons, it can crush separatism and make sure that terrorists can’t hide across the border.

It has been observed on the one hand that China’s long-term plans of cementing ties with Pakistan are a means to contain India. On the other, Pakistan has in return hugged China close during periodic flare-ups in Pakistan-American relations, pointedly dubbing Beijing “an all-weather friend.”

Along naval borders, it is becoming increasingly clear that China’s “near sea” includes its territorial waters as well as its claimed 200-nautica-mile Exclusive Economic Zones (EEZs) around the nation’s extended seashores. A critical issue for this evolving defense strategy is that China has many disputes in this vast area. The most challenging of these conflicts are with Taiwan and with the United States over U.S. military activities in the Chinese-claimed EEZs. China is also engaged in territorial disputes with Japan in the East China Sea and with several Southeast Asian nations in the South China Sea. Consequently, China has long desired to have an aircraft-carrier-led, blue-water navy to strengthen its position in these disputes. (Article continues below.)

China’s First Aircraft-Carrier: Varyag

China’s aircraft carrier debut was in 1998 with the acquisition of the ‘half-built’ Varyag from the Ukraine. The warship was intended to serve in the Soviet Pacific Fleet but the construction was abruptly halted when the Soviet Union disintegrated in 1991.China bought the half-built aircraft carrier for $20 million after it was inherited by the Ukraine out of the collapse of the Soviet Union. When purchased, the warship was an empty and rusty shell, stripped of all critical equipment. China, however, was determined to bring it to life, and it took nearly 10 years to finish the warship.

China set to modernize its defense in the mid 90s, but it quickly stepped up efforts on account of several imperative events—beginning with the Taiwan Strait crisis in 1985 and subsequently the display of U.S. military power over the last two decades: the Gulf war of 1991, the Kosovo air campaign of 1999, and the anti-terrorist operations in Afghanistan and Iraq in the early 2000s. Since then, Chinese leaders felt their military needed to take urgent measures or be marginalized for good.

The Chinese were desperate to induct the aircraft carrier Varyag into the Chinese Navy. They put forth undisclosed but understandable additional expenses and a tremendous effort to do so. According to a Chinese Defense Ministry spokesman, Varyag is expected to make short test sails in 2012 when it will be fully operational. An Indian defense expert estimated that China will be able to carry out full-fledged, aircraft-carrier-based operations as soon as 2017.

In a Congressional hearing, a leader of the U.S. Pacific Command said that recent Chinese military developments have been dramatic. China has already tested long-range missile that are effective against warships. After years of denial, Chinese official have confirmed that they intend to deploy an aircraft carrier group within the next few years.

Varyag will be used as the Chinese Navy’s training platform. The diesel and steam powered aircraft-carrier has limited capacity for distance battle missions after all, but the Chinese leaders are convinced that the aircraft carrier has not outlived its usefulness. In addition, they are willing to invest significant resources over the next 10 to 15 years to build several homemade aircraft carriers. They are expected to be built in time to help China pursue its interest in the South China Sea, the Indian Ocean, the Western Pacific, and beyond.

Over the past year and a half, China has moved to assert territorial claims in the resource-rich but hotly-contested waters near the Philippines and Vietnam. Many of the region’s smaller countries have asked Washington to re-engage in the region as a counterweight.

The South China Sea, in fact, has long been at the centre of dozens of territorial disputes between China and members of the Association of Southeast Asian Nations (ASEAN). The disputes center on the ownership of hundreds of small Islands, rocks, and reefs in the South China Sea and the jurisdiction rights that would allow the disputants access to valuable maritime resources, both in the water and beneath the seabed.

As China emerges as an important, global super power, Beijing’s political, commercial, and strategic imperative has been to expand its military footprint across the globe. It is seeking to project its naval power beyond the Chinese coast, from oil ports in the Middle East to the shipping lanes in the Pacific, much like the United States has done over the last century.

“With our naval strategy changing now, we are going from Coastal defense to far sea defense,” Rear Admiral Zhang Huachen, deputy commander of the Chinese East Sea Fleet, said in an interview with Xinhua, the state news agency.

Breaking their traditionally narrow military doctrine, “far sea defense” is China’s new strategy that enhances their long-range capabilities. Chinese admirals now say they want warships to escort commercial vessels crucial to the country’s economy through waters such as the Persian Gulf and Strait of Malacca in Southeast Asia, and they want to help secure Chinese interests in the resource-rich South and East China Seas.

To do this, China is in the process of developing a sophisticated submarine fleet that could prevent foreign naval vessels from entering its strategic waters if a conflict erupted. According to U.S. naval observers, China has also tested long-range missiles that could be used against large aircraft carriers, and now a Chinese government statement has confirmed that they intend to deploy an aircraft carrier fleet within a few years.

China has been quietly acquiring more submarines, missiles, aircraft carriers, and other weapons. According to a New York Times report, Mr. Huang Jing, a scholar of the Chinese military at the National University of Singapore, was surprised to see the new development and said, “We were in a blinded situation. We thought the Chinese military was 20 years behind [the Americans], but we suddenly realized China is catching up.”

A 2009 Pentagon report estimated Chinese naval forces at 260 vessels, including 75 principal combat ships and more than 60 submarines. The report noted the building of an aircraft carrier and said China continues to show interest in acquiring carrier-borne jet fighters from Russia. China recently built at least two Jin-class submarines, the first regularly active in the fleet that have ballistic missile capabilities, and two more are under construction. Two Shang-class nuclear-powered attack submarines recently entered into service, according Mr. Huang.

China’s official military budget was $91.5 billion for 2011. Officials in the U.S. had estimated China’s total military spending in 2009 to be more than double its official numbers. If that is the case for 2011, China’s military spending could be near 3.5 percent of its GDP for the previous year. This would put China securely in second place for military spending—behind the U.S.’s estimated 4.7 percent for 2010.

According to a Western military expert, the overall plan reflects Beijing’s growing sense of self-confidence and increasing willingness to assert its interests abroad. Though the naval expansion will not make China a serious rival to American naval supremacy in the near future, and though there are few Chinese aggressive intentions toward the United States, China’s smaller ASEAN neighbors and particularly India—which was attacked by China in 1962 and still has unsettled border disputes—feel Beijing’s posture is apparently dangerous. Beijing seems to be committed to the idea of a “peaceful rise”—the concept that China is taking up its natural role in new international order and targeting to replace U.S.’s world hegemony in near future.

Love-Hate Relations: India and its Neighbors

In the face of rivals China and Pakistan, India must play the role of ‘mother’ to her smaller neighbors — even if her ‘sons’ are troublesome.

Northern India and neighboring countries with disputed borders shown overlapping.

Two broad trends have developed in the last decade as India has sought to strengthen its relationships with neighbors and back up the initiative with fast-changing international policies.

One trend is that with its growing economic clout, India is spending internationally to assist with mutually beneficial projects and is thus investing in global development. The other is that this clout and India’s rising profile are raising tensions and rivalries with the larger neighbors China and Pakistan.

The world is taking note of India on both these counts.

The twin objectives behind these trends are to gain a prospective permanent place in the United Nations Security Council and to emerge as a regional leader. The former is stated; the latter is not. Also unstated—but obvious enough—is the need to carry its neighbors along if both or either of these objectives are to be achieved.

India’s ability and willingness to spend has helped, but the results are uneven and slow.

India did not have the resources to spare in the last century, and it did not clearly see smaller neighbors as potential allies or economic partners. They were only meant to be ‘assisted’ or ‘helped’. An attachment to its local allies was rarely expressed, and when it was, it did not meet similar sentiments.

Never before would India have spent over $2 billion in Afghanistan, given credit to the tune of $1 billion to Bangladesh, or pledged another $100 million to Myanmar.

On becoming chair of the South Asian Association for Regional Cooperation (SAARC) in April 2007, India announced duty-free imports from all Least Developed Countries (LDCs) in its area. The beneficiaries include Nepal, Bhutan, and Bangladesh, but not Pakistan and Sri Lanka who are not LDCs.

During the SAARC Summit at the Maldives, on November 10, 2011, Indian Prime Minister Manmohan Singh rooted for greater economic integration and connectivity in South Asia. He announced the reduction of the ‘sensitive list’ of taxed imports from least-developed countries under the South Asian Free Trade Area Agreement (SAFTA). It would be reduced from the existing 480 tariff lines to 25 tariff lines.

Singh said India would immediately give zero basic customs duty access to all items removed from the list.

Bilateral trade with its South Asian neighbors rose more than a third in 2010-11 over the previous year to nearly $16 billion. Trade with Bangladesh alone has almost doubled to more than $4 billion over the same period.

To fuel this growth, India is building a web of ports, highways and railways that will help it to integrate better with the markets of the sub-continent.

In addition, India is busy working out a handsome package for Sri Lanka to assist in the rehabilitation of the Tamil populace in the strife-torn North and North-Eastern regions of the island nation. Although a difficult situation, it is matter of good diplomacy and managing domestic politics.


Bhutan is the basis for a number of projects undertaken by the Government of India and both public and private Indian enterprises. India buys the surplus power that Bhutan produces with Indian help, and India has pumped millions by way of developmental aid and assistance into Bhutan over the past half-century.

Overall—and quite surprisingly—it is tiny Bhutan that takes the biggest portion of Indian financial assistance to other countries. In the fiscal year 2010-11, India’s assistance to Bhutan including loans and aids amounted to roughly $3.3 billion.
India has even revised an old treaty to make the neighbor more comfortable. On February 8, 2007, the India-Bhutan Friendship Treaty, signed originally during the British era in 1865, was substantially revised, and Article 2 in the 1949 treaty, which the Bhutanese were uncomfortable with, was amended.

Earlier, Article 2 of the 1949 treaty read: “The Government of India undertakes to exercise no interference in the internal administration of Bhutan. On its part the Government of Bhutan agrees to be guided by the advice of the Government of India in regard to its external relations.”

In the revised treaty, this reads as, “In keeping with the abiding ties of close friendship and cooperation between Bhutan and India, the Government of the Kingdom of Bhutan and the Government of the Republic of India shall cooperate closely with each other on issues relating to their national interests. Neither government shall allow the use of its territory for activities harmful to the national security and interest of the other.”
The wording now pays more respect to Bhutanese sovereignty and paves the way for Bhutan to advise India on some matters.

Contributing financially, India has aided Bhutan in commissioning three major hydroelectric projects. These are the Chukha Project (336 MW), the Kurichhu Project (60 MW) and the Tala Project (1020 MW). The fourth and the biggest hydel power project, Punatsangchhu (1200 MW), is currently under construction.

India is also helping Bhutan develop a knowledge-based economy by way of a contribution the equivalent of $40 million. The ‘Total Solutions Project’ will provide access to technology and ICT solutions to a significant proportion of Bhutan’s population over the next five years. The project envisages training and establishing ICT enabled schools, computer labs, and computer stations in rural Bhutan.


Afghanistan, though not technically a neighbor, is the second largest recipient of India’s assistance with the equivalent of $600 million for the fiscal year 2010-11.

In Afghanistan, India is looking beyond the Silk Route. The transit trade agreement between Islamabad and Kabul will open the land route for the movement of goods through the Wagah border, and New Delhi is likely to ask Islamabad to provide transit facility for its goods.

Apart from the land route, alternative trade channels are being worked out by New Delhi to strengthen economic relations between the two countries. India is looking at developing ports, rail lines, and roads to boost trade relations after gaining the confidence of the people of Afghanistan by setting up hospitals and other facilities.

India and Afghanistan have reached a pact on strategic and economic co-operation, including the exploration of untapped mineral wealth in the war ravaged nation.

New Delhi plans to construct a 900-km railway line that will connect Chabahar port in Iran to the mineral-rich Hajigak region of Afghanistan. It will reduce Afghanistan’s dependence on Pakistan by gaining further access to sea, and it will open up opportunities for Indian companies to explore Afghanistan’s mineral wealth, believed to be worth $1-3 trillion.

U.S. geologists and government officials estimated last year that Afghanistan was sitting on unexploited mineral reserves such as copper, iron ore, lithium, gold and cobalt worth over $1 trillion. Gaining access to the unexplored minerals would boost both the Afghani and Indian economy.

“Afghanistan’s economic integration with the Indian economy and South Asia as a whole is in the national interest of the people of Afghanistan, and one of the ways to achieve this is to promote closer trade, investment, and transit links,” Prime Minister Manmohan Singh has said.


Nepal has long counted India as its largest trade partner and greatest source of foreign investment and tourists. According to figures for the Nepalese fiscal year ending July 15, 2009, bilateral trade with India accounted for 58.22% of Nepalese total external trade. India also remains Nepal’s largest source of foreign investment, accounting for 43.17% of the total foreign investments in Nepal.

India continues to invest in Nepal even faced with new criticism. While the Nepalese monarchy was mute in its opinion of the Indo-Nepal Treaty of Peace and Friendship of 1950, the newly empowered Maoists have been more vocal in demanding scrapping or at least reviewing the treaty.

In essence, it is a bilateral treaty establishing a close strategic relationship between the two South Asian neighbors. The treaty was signed on July 31, 1950 by the then-Prime Minister of Nepal Mohan Shamsher Jang Bahadur Rana and Indian ambassador to Nepal, Chadreshwar Narayan Singh.

The treaty allows for the free movement of people and goods between the two nations and a close relationship and collaboration on matters of defence and foreign affairs. While India values the treaty for deflecting the influence of its regional competitor China, the treaty has been unpopular with many in Nepal who often regard it as a breach of their sovereignty.

Upon forming a coalition government after the 2008 Nepalese Constituent Assembly election, the leader of the Communist Party of Nepal (Maoist) Pushpa Kamal Dahal Prachanda said on April 24, 2008 that the 1950 treaty would be scrapped and a new pact would be negotiated with India. The announcement signaled Nepal’s willingness to review the treaty.

Nepal has since been embroiled in internal issues seriously touching on its polity (see page 40), and there has since been no serious move by either Kathmandu or New Delhi to reopen the treaty.

India’s cooperation so far has risen mainly from Nepal’s heavy economic dependence on India, and New Delhi wants to keep Beijing’s influence away from Kathmandu as much as possible. India and Nepal have continued to cooperate despite the political controversy it generates in the Himalayan nation.

The grant assistance extended to Nepal during 2008-09 under the ‘Aid to Nepal’ budget was roughly the equivalent of $30 million. In addition, the Indian government has extended considerable economic assistance to the ongoing peace process in Nepal.

The Small Development Projects scheme offered by India delivers development assistance at the grass-roots level in sectors identified with the local population. It now covers over 335 projects with an outlay of approximately $37 million.

India and Nepal signed a revised trade treaty in October 2009 that allows Nepal greater access to the Indian market. India and Nepal also have a treaty of transit, which confers transit rights through each other’s territory on mutually agreed routes and modalities. The treaty was last renewed for seven years in March 2006.


To Bangladesh, India has pledged to accept imports of eight million pieces of apparel duty-free. This is despite the fact that both nations compete in the garmet market.

For Bangladesh, there is another game changer—hooking on to India’s electricity grid. This will give it access to electricity generated not only in India but also in Bhutan and Nepal.

India is also working to provide land access between Bangladesh and India’s other neighbors Nepal and Bhutan. The goal is to facilitate movement of goods for trade and to enable land-locked Nepal and Bhutan to access the Bangladeshi ports of Chittagong and Mangla.

India’s own access to the two ports and to its isolated northeastern region was, however, prevented by Bangladesh, which was unhappy with India’s failure to sign the much-awaited agreement on the sharing of Teesta river waters.

The agreement was blocked in the end by Indian West Bengal Chief Minister Mamta Banerjee who was widely perceived as giving her domestic political compulsions, vis-a-vis her Marxist opponents, priority over the country’s bilateral relations with a key neighbor.

The issue was unfortunately mishandled by Indian officials, and this failure cast a shadow over the Indian Prime Minister’s much-prepared visit to Bangladesh. A major opportunity was lost by India to cement good relations with its neighbor.


Conflicts have existed since the border was first drawn between the Pakistan and India in 1947, and their trade has since dwindled because of adversity and remnant hostility, but new economic agreements between the countries might change that.

At the time of India and Pakistan’s independence, trade relations were very strong—70 per cent of Pakistan’s trade was with India, and New Delhi exported 63 per cent of its goods to Islamabad. It came to less than one percent in 2010-11.

In addition to direct trade, $1.5 billion, nearly the same amount, is traded indirectly every year between India and Pakistan. As it stands now, both are losing revenue because this amount is being routed through third countries, such as the

United Arab Emirates. The consignment goes first from Delhi to Dubai, Dubai to Karachi, and from Karachi to different cities in Pakistan, and it adds to a lot to the cost of trade.

There are concerns that a re-opening of trade between the two could flood Pakistan’s markets with Indian goods and affect their domestic industry. Nisha Taneja, a trade analyst with the Indian Council for Research on International Economic Relations, reports that this fact is a misnomer, saying “China is the biggest trading partner of Pakistan, and New Delhi would have to be competitive to get its market share.”

Either way, trade might be revitalized between the two with a preferential trade agreement, which would provide lower duties and spur greater economic activity in both countries.

With this in mind, Pakistan has granted India the title of Most Favored Nation (MFN), actually restoring something that was lost in the wake of the 1965 war. While India has welcomed the initiative, Pakistan is divided on the issue.

Pakistan has in the past been wary of a gradual approach to peace-making, fearing India would try to ‘normalize’ ties while maintaining its position on the disputed region of Kashmir. The government in Pakistan holds the Kashmir issue to be a priority in Indian-Pakistani relations. Hence the Indian government has conveyed in recent meetings that it is ready to discuss all issues, including Kashmir.

Basing optimism on the need for economy to take precedence over politics, sections of the Indian media are excited. Business Standard called the trade talks “a game-changer”.  Mint newspaper noted that bilateral trade with Pakistan now amounts to only $2 billion, compared to India’s global trade of about $600 billion. It quoted Biswajit Dhar, head of Delhi-based think tank Research and Information System for Developing Countries (RIS), as saying that, “if trade relations improve, there will be movement on the political level because a constituency for peace will be created for better ties.”

The media agrees. On November 26, 2011, of The Indian Express reported that “this has been an historic year for India’s changing trade relations with two of its important South Asian neighbors — Bangladesh and Pakistan. The idea that economic gains through freer trade could serve as a powerful means for conflict resolution appears to be finally finding full acceptance by all three countries.”

Underscoring the importance of bilateral trade last year, India helped Pakistan with sugar, and Pakistan both imported and then exported Indian onions. Yet there is no investment promotion and protection treaty between the two countries. Unless those protocols are in place, long-term trade is not possible.

So, the overall picture is not very positive when it comes to economic ties as a whole between India and Pakistan. The bottom line is that the businessmen have got to be enthused.

Even with policy changes in sight, India and Pakistan are some distance away from investments actually crossing their border given that companies would be worried about a reversal of policy. But in case of trade, Pakistan can show the way and it has been suggested in the Hans India newspaper that India can reciprocate through easier visa norms.

By contrast, it is noteworthy to compare the $2 billion annual Indo-Pak trade with the trade India has with China. India-China trade hit $60 billion this year. The leaders have set a target of $100 billion by 2015.

This is despite the uneasy relationship that the two have—what with an unresolved border dispute, China’s growing brinkmanship over a myriad issues ranging from Dalai Lama’s presence in India to claims over several parts of North-Western and North-Eastern India, and its protests over India’s presence in South China Sea to explore oil and gas off the Vietnamese shores. (See page 20 for an analysis into China’s military policies in the Indian Ocean and South China Sea.)


In a difficult neighborhood historically and geographically, India occupies a strategic position in the sub-continent. It shares borders with nine neighbors, and adding to complications, none of India’s neighbors have a common border other than Myanmar and China. India is also centrally located in the Indian Ocean, placed in the midst of much of the seafaring.

Since its independence, India has lived amidst a hostile geo-political environment caused by historical grudges and by the asymmetry of its size since it is the largest, the most populous and most endowed in terms of resources. In India’s situation, it would be apt to start on the age-old premise that one can choose friends, but not neighbors.

In the West, Pakistan gained independence in adversity to India and the two remains congenitally hostile. In the North, geopolitical rivalries have developed with China almost since the latter’s birth in 1949—despite the fact that India supported the rise of independent China and, subsequently, its permanent membership on the UN Security Council.

Many smaller nations share the area. South lie Sri Lanka and the Maldives; in the East, it is Bangladesh, Nepal, and Myanmar. These small states have by and large played favorites in Sino-Indian relations. To a certain extent, each has turned back and forth between the competing Asian super powers based on which had the most to offer.

Nearby Nepal was beset with internal political struggle for the past decade. Only Bhutan has remained at peace with India and with itself.

Sri Lanka has a serious problem of its own with no end in sight to the ethnic strife among the majority Sinhalas and the minority Tamils. India’s soft approach emboldened Sri Lanka to launch military offensives to crush the Liberation Tigers for Tamil Eelam (LTTE).

India virtually conceded to this civil war.  The long-lived conflict in Sri Lanka left around 300,000 internally displaced persons (IDP) living in camps in the north of the island nation, and it devastated infrastructure in the affected areas.

International reaction was one of shock and dismay to the Indian television documentary entitled “Sri Lanka’s Killing Fields”. But India’s External Affairs Minister S M Krishna said only: “A just and fair settlement of the political problem is of utmost importance. I have stressed the need for an early withdrawal of emergency regulations, [for] investigations into allegations of human rights violations, [for] restoration of normalcy in affected areas, and [for] redress of humanitarian concerns of affected families.”

In Nepal, there is no let-up in attacks on Prime Minister Baburam Bhattarai from his detractors even within his own United Communist Party of Nepal due to ideology and his steady rise to national prominence.


China’s relations with India pose the biggest challenge to the nation. Dealing with a difficult, stronger neighbor that has dared the world powers, forcing them to engage it, has not been easy.

India suffers comparisons and comes out poorly on most counts—not just among the world community that believes in might is right, but also among critical, almost self-deprecating, critics at home.
China’s dogged alliance with Pakistan on the military front—though the economic involvement is modest— remains a serious irritant for India. It finds frustrating Pakistan’s greater successes at making missiles and nuclear weapons, all with the clandestine and spurious help of not just China but North Korea.

The Chinese refusal to even take note of Pakistan’s role in fomenting terrorism in South Asia and exporting it to other regions—despite the fact that even the Uighour Muslims fighting Beijing are trained in Pakistan—frustrates India. The Indian intelligentsia is divided between hawks and moderates on China. This makes their policies less coherent. India is unable to decide whether and how to confront China. The western nations’ subtle overtures to co-opt India into their plans to counter China—while doing business with it—complicate the Indian approach further.

The People’s Daily in China has observed that nations with an “envious, jealous, and hateful attitude toward China” have been singled out to bear the responsibility of any potential “changes in the international and regional security landscape that shall negatively impact upon China.” It states that these actions “will benefit one country: India.”

At the East Asia Summit last year, these Sino-Indian relations came up regarding the South China Sea. Reminiscent of the 1960s to 1980s, China has begun to oppose India openly while keeping up the façade of moderation at a bilateral level, but even this was shed at the East Asia Summit at Bali.

The think tank Centre for Land Warfare Studies (CLAWS) in India reported on the discussion:

The agenda of the recently concluded East Asia Summit incorporated a wide canvas with an attempt of keeping the divergence pertaining to the South China Sea out of the purview of the summit. Notwithstanding the intent, Prime Minister Manmohan Singh of India sent out a clear and firm message to his Chinese counterpart, Wen Jiabao, by choosing to reject Chinese objections to the Indian presence in the South China Sea. Stating that Indian interests were “purely commercial and that sovereignty claims must be resolved according to international laws”, Singh visibly admonished Chinese claims over the issue.

The response by the Indian Prime Minister came in following Wen Jiabao’s warning that “outside forces” should refrain from getting embroiled in the South China Sea dispute. Wen further expressed, “The dispute which exists among relevant countries in this region over the South China Sea is an issue which has built up for several years… It ought to be resolved by countries directly involved… Outside forces should not, under any pretext, get involved.”

In addition, China demanded that India cancel a Buddhist conference in New Delhi which the Dalai Lama was expected to address. The conference coincided with the boundary talks between Dai Bingguo, a Chinese diplomat, and Shivshankar Menon, the Indian National Security Advisor, were also to be held there.

India refused to comply with the demand, saying this was a spiritual conference and the freedom was an essential part of New Delhi. The Indian side even promised full security to the Chinese delegates. Beijing refused and called off the talks. Although later Chinese officials said they wanted to hold the talks “very soon”, India has reacted coolly.

Many Indian analysts insist that China is ‘surrounding’ India with military bases near the Indian Ocean called the “String of Pearls”, but the confrontation has moved to the cultural arena as well. News agencies in both countries are running smear campaigns against the other.

Illuminating both China’s efforts and their own perspective on the matter, the Times of India reported the following on November 26, 2011:

[China] had proposed a “Lumbini project” at Lumbini in Nepal, the birthplace of Buddha. Earlier this year, a Chinese organization believed to be close to the party elite, had promised a $3 billion investment in Lumbini (which would translate roughly to 10% of Nepal’s GDP) with an airport, hotels, highways and a university.

While seemingly innocuous, India suspected that this could be used to promote China-friendly Buddhist leaders in all the three main schools of Buddhism—Mahayana, Hinayana and Tibetan Buddhism. Under Indian pressure, Nepal agreed to cut the Chinese links to the project. Sources here said China wanted Lumbini to be the focal point for Buddhists in the world. At present, Buddhist travel to India to meet Dalai Lama and to visit Sarnath and Bodh Gaya. Besides, through a project like Lumbini, China may reckon it would be easier to “control” both religion and religionists.

Such a stance is not new in Indian media. Amidst controversy over skirmishes on the Sino-Indian border during the summer of 2010, China had accused the Indian media of carrying out a baseless anti-Beijing campaign.

However, since the start of the Indian presence in the South China Sea, the Chinese media itself has been carrying out such a campaign against India. The state-run Xinhua news agency in China said that India has an “inferiority complex” and lives “under the delusion that China lays out a strategic chessboard to lock up and contain India”, according to a report in The Hindu out of India.


Though faced with difficulties in local relations, India is attempting to sponsor development and infrastructure abroad. This growing international profile, however, is increasing tensions with its rivals. This study can be best concluded with comments from two diverse publications, one from Afghanistan and the other from Bangladesh:


South Asian countries are the least integrated countries in the global system. India has been making a tremendous effort to foster regional dialogue and understanding in order to turn South Asia into an economic and political bloc. Regional cooperation is the only recipe for overcoming our challenges. Because of its rising clout, India can play a unique role in strengthening regional cooperation through organizations such as SAARC. Afghanistan is a big beneficiary of India’s positive regional policy.

Similarly, India’s economic power creates great opportunities for Afghanistan, and its growing middle class constitute the biggest market for our products. With improved security and better regional cooperation, we will hugely benefit from India’s trade with the Central Asian countries. The TAPI pipeline project, which will ship Turkmen gas to Pakistan and India through Afghanistan, could not materialize without Indian investment. Thus, Indian investment in the region is very appreciated, particularly in a time when major economies of the world are facing deep crises.

Also, India’s soft power in Afghanistan, which is not limited to Bollywood influence alone, has been growing very fast over the past decade. The number of Afghan students who are attending Indian colleges and universities has expanded yearly. New Delhi has become an important destination for wealthy Afghans either for tourism or quality healthcare. In addition, joint Indian-Afghan private investment in education and healthcare in major Afghan cities is making a major contribution in the development of our country.

India’s emergence at the global stage is welcomed by Afghans, and its positive political and economic impact since the fall of the Taliban regime in 2001 is visible to us. Despite many domestic and regional challenges, India’s investment in reconstruction and development of Afghanistan is tremendous, and Afghan people appreciate this unconditional economic and political assistance.

-Haroun Mir, Director of the Afghanistan Centre for Research and Policy Studies, Kabul

India’s true leadership role lies in helping all its smaller neighbors reach their economic potential and become flourishing democracies. India must admit that it has, so far, failed to do so, and sincerely introspect why.

India’s position as a regional leader is a fact of history. It’s emergence as an effective one is a matter of time. Much will depend on the wisdom of her leadership. For far too long India has allowed its problems with Pakistan to absorb almost all of its attention and resources at the expense of its bilateral relations with others. In fact it neither spent the time nor the resources to mend fences with its other neighbors which often needed a lot of mending. The Indian media is guilty of the same.

Greater leadership role for India will naturally emerge as the country grows. It is inevitable. Its rising importance and consequent role of India is seen both with fear and hope. Fear, that India will use its rising economic and military power to bulldoze its will on her smaller neighbors, and hope that India will be able to see the bigger picture and help her smaller neighbors reach their economic potential and thus build a network of interdependent relations that will tie us in a common purpose and shared dreams.

It is in India’s interest to help Nepal, Myanmar, Bangladesh, Sri Lanka and Maldives rather than adopt an adversarial approach.

This has not yet happened. But it must, not only for the smaller neighbors, but also for India.

-Mahfooz Anam, Editor of The Daily Star, Bangladesh

Autumn 2017