India and Japan: a confluence of interests

ShiABE

By Dr Sanjaya Baru, Director for Geo-economics and Strategy

India’s Prime Minister Manmohan Singh arrives in Tokyo this week for what may well be his most important foreign visit in his second term in office. The visit’s importance derives as much from the particular economic interests of India and Japan, as both economies seek to boost growth, trade and investment, as it does from the realisation that they must work together to temper China’s ‘new assertiveness’ in its neighbourhood.

Confluence of the two seas
After a gap of nearly six years, there may once again be a meeting of minds between Prime Minister Singh and his host, Japan’s bold ‘new’ leader Shinzo Abe, who, during his first term in office in 2006–07, took the initiative to seek a ‘new relationship’ with India.

On a visit in August 2007, he told the Indian Parliament that Japan had ‘rediscovered’ India ‘as a partner that shares the same values and interests and also as a friend that will work alongside us to enrich the seas of freedom and prosperity, which will be open and transparent to all’.

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Rio’s man takes WTO reins

Roberto Azevedo WTO Photo

Sanjaya Baru’s most recent column in the Indian Express focuses on Brazil’s Roberto Carvalho de Azevedo, who has just been announced as the next director general of the World Trade Organisation (WTO). Azevedo will be the first Latin American in the job when he takes over from Pascal Lamy on 1 September.

Baru, the IISS director for geo-economics, says that the media stereotyped the Brazilian Azevedo as the voice of protectionism and of the global south in his race for the job against Mexico’s Herminio Blanco. But the full picture is much more complex.

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The power of five for China and India

Manmohan Singh meets Xi Jinping Photo Office of the India Prime Minister

There is something about the number five in Sino-Indian relations, writes IISS Director for Geo-Economics and Strategy Sanjaya Baru, in a new piece looking back at the recent BRICS summit in South Africa. There, Asia’s two giants had a chance to improve their relations when the Chinese and Indian leaders met on the sidelines.

The two countries’ relationship has long been defined in terms of the five-element ‘Pancha Sheela’, involving mutual respect for each other’s territorial integrity and sovereignty; mutual non-aggression; mutual non-interference in each other’s internal affairs; equality and mutual benefit; and peaceful co-existence.

‘Now China’s new leaders have enunciated a new Pancha Sheela’, writes Baru, ‘with President Xi Jinping offering a “five-point proposal” for Sino-Indian relations. The updated principles would maintain strategic communication and healthy bilateral relations; harness each other’s strengths and expand cooperation in infrastructure, investment, and other areas; deepen cultural ties and increase mutual understanding and friendship; expand coordination and collaboration in multilateral affairs to safeguard developing countries’ legitimate interests and address global challenges; and accommodate each other’s core concerns and reconcile bilateral disagreements amicably.’

Baru says India would be happy to embrace these principles, but the fifth point is tricky, because it leaves China’s ‘core concerns’ undefined. Traditionally, these were Tibet and Taiwan, but Chinese officials have recently referred to their claims on the South China Sea as a ‘core interest’ as well. And this has opened up a Pandora’s box.

Meanwhile, Indian Prime Minister Manmohan Singh has his own five principles for the Sino-Indian relationship.

Read the full story at Project Syndicate


Decoding Manmohan Singh’s red lines

Manmohan Singh meeting soldiers on National Army Day, 15 January. Photo: Office of the India Prime Minister

Manmohan Singh meeting soldiers on National Army Day, 15 January.

By Dr Sanjaya Baru, Director for Geo-economics and Strategy

Many eyebrows were raised in Delhi and around the world when Prime Minister Manmohan Singh asserted that ‘it cannot be business as usual’ with Pakistan after the recent incident on the Line of Control (LoC). Because these remarks came after the National Security Adviser briefed opposition leaders about the government’s approach to the issue, the leader of the opposition in the Lok Sabha took credit for the prime minister’s tough stance, while welcoming it. However, it has since become clear that Singh was adopting a more nuanced approach, not the sledgehammer response that the Bharatiya Janata Party and hotheads in the media were seeking.

The many expressions of surprise, accompanied by gratuitous remarks about Singh’s ‘uncharacteristic’ toughness, ignore the fact that on vital national-security and foreign-policy issues, the prime minister has always drawn red lines and stuck to them. These red lines have been drawn both with respect to political parties and ministerial colleagues at home and foreign governments. When it comes to foreign policy, Singh has jealously guarded prime ministerial turf and defended the national interest.

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Setting the agenda for Russia’s G20 presidency

Russian G20 presidency. Photo G20
Russia has assumed the helm of the G20 forum of leading economies at a time of concern that the group – so decisive in the wake of 2008 global financial crisis – is in danger of losing its way. What can Moscow do during its year-long presidency to help restore the group’s credibility?

Colleagues at the Council on Foreign Relations have canvassed opinion, ‘hoping to assist the government of Russia in defining priorities’. As part of its Council of Councils initiative, which includes the IISS, the CFR has published a collection of policy ‘memos’; one comes from Sanjaya Baru, IISS director for Geo-economics and Strategy, and Samuel Charap, our senior fellow for Russia and Eurasia.

In ‘Russia and the G20′, Baru and Charap point out that Russia is unique in being both a member of the G8 leading industrialised nations and one of the BRICS (the term for the world’s fastest-growing emerging markets, which also refers to Brazil, India, China and South Africa). Although Moscow has a mixed record in leveraging its position between the West and ‘the rest’, it does have the potential to act as a bridge between advanced and developing economies, they believe.

Russian President Vladimir Putin has set out five central issues for the G20 summit in St Petersburg this September, from reforming the international currency system to advancing discussions on energy security and climate change. Meanwhile, emerging nations have been calling for a greater role in international financial institutions like the IMF and World Bank, and the latest round of WTO trade negotiations has long been stalled.

The IISS authors focus on the ways in which the G20 could respond to its critics by taking forward the agenda agreed at its September 2009 summit in Pittsburgh to speed up the restructuring of the IMF and World Bank shareholdings, reviving the Doha Round of WTO talks and discouraging countries from ‘pursuing beggar-my-neighbor trade and currency policies’.

While they recognise the problems hampering the G20′s effectiveness – from national leaders’ current domestic preoccupations to overlap with G7, G8 and BRICS meetings – Baru and Charap suggest that the G20 has enormous influence over the IMF and the IBRD (International Bank for Reconstruction and Development), as it includes almost all the major shareholders. ‘Even the WTO can be guided by the G20′.

The same is not necessarily true, they argue, of other global negotiations, especially those relating to climate change, where many non-G20 countries have such major stakes.

Read the collected memos: ‘Prospects for the Russian Chairmanship of the G20′


What new Japanese PM Abe means for India

Shinzo Abe and Manmohan Singh

By Dr Sanjaya Baru, Director for Geo-economics and Strategy

‘The Pacific and the Indian Oceans are now bringing about a dynamic coupling as seas of freedom and of prosperity’. With those words Shinzo Abe, now re-elected prime minister of Japan, launched into an historic address to the Indian Parliament in August 2007. A ‘broader Asia’, he said … ‘is now beginning to take on a distinct form. Our two countries have the ability – and the responsibility – to ensure that it broadens yet further and to nurture and enrich these seas to become seas of clearest transparence.’

To an audience that had not yet absorbed the full import of the historic shift that Abe was seeking in Japan’s relations with India, he added: ‘This is the message I wish to deliver directly today to the one billion people of India. That is why I stand before you now in the Central Hall of the highest chamber, to speak with you, the people’s representatives of India.’

Shinzo Abe is not just another prime minister in a country where prime ministers come by the dozen. He has pedigree and has acquired courage and a vision. And over the weekend he has also won a massive and historic verdict in favour of his Liberal Democratic Party (LDP).

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Global perils for India Inc.

The airport in Male, capital of the Maldives

Indian diplomats are having to navigate a tricky course in supporting Indian businesses in the Maldives and elsewhere

A couple of seemingly unconnected stories this week have more in common than expected, IISS’s Sanjaya Baru suggests in a new column in the Economic Times. Indian-born British tycoon Lakshmi Mittal has found himself at the centre of an attack by French politicians: he is accused of ‘lying’ and failing to keep his promises to France over plans to close blast furnaces owned by his firm ArcelorMittal. Meanwhile, a spokesperson from India’s ministry of external affairs set a new benchmark in diplomacy by publicly complaining about a decision by the Maldives government to cancel Indian group GMR’s contract for the upgrade and management of the airport in Male, the Maldives capital.

Both cases raise interesting questions about government backing for domestic businesses. In these instances, the businesses are Indian, but the phenomenon cuts both ways. Western governments have also often expressed concerns about their firms and brands being targeted by campaign groups in India. ‘More recently, even Chinese diplomats have had to step in to protect the interests of their firms in India,’ Baru writes.

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ASEAN: India’s other neighbours

Phnom Penh: Prime Minister Manmohan Singh with others Head of States  pose a group photo during a 10th ASEAN-India Summit  at Peace Place in Phnom Penh, Cambodia on Monday. PTI Photo by Kamal Singh

The tenth summit between India and ASEAN (the Association of Southeast Asian Nations) is under way in Cambodia during the first half of this week – as part of the 21st ASEAN summit. And to coincide with the ASEAN-India meeting, IISS Director for Geo-economics and Strategy Sanjaya Baru has an article in the Hindu discussing  the concept of India’s ‘neighbourhood’. He starts with the recently redesigned website of India’s External Affairs Ministry (mea.gov.in), which ‘has a link right on top of its home page, just below the photograph of the new Foreign Minister Salman Khurshid, to ‘India and Neighbours’.

‘Sadly,’ Baru continues, ‘the ‘neighbours’ listed are only her so-called ‘South Asian’ neighbours, the inhabitants of the Indian subcontinent. One cannot blame just those who have constructed this website for this myopic view of what constitutes India’s neighbourhood. The occupants of New Delhi’s Raisina Hill have for long seen only the Himalayas, the deserts and the Gangetic plains around them. When one thinks of the ocean as a barrier rather than a bridge one cannot come around to thinking of countries on the other side of the waters as ‘neighbours’.

Prime Minister Manmohan Singh has never been a victim of this common Delhi affliction. Why, only earlier this year he told the chief guest at India’s Republic Day celebrations, Thailand’s Prime Minister Yingluck Shinawatra, that India and Thailand are ‘maritime neighbours’. That is a message that Dr Singh has proudly carried in recent years to Malaysia, Indonesia, Myanmar, Iran, Saudi Arabia and Oman.

However, in repeating that message to his hosts at the ASEAN-India Summit on Monday, Dr Singh must remember that India’s eastern maritime neighbours expect a little more attention than they are getting.
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Rising yuan in the land of setting yen

One Yuan Renminbi

By Dr Sanjaya Baru, Director for Geo-Economics and Strategy

The directors of the International Monetary Fund and the World Bank return to Tokyo this week for their annual meetings after a gap of 48 years. It’s a different Japan. The aging of the host nation, the rise of China, the ‘shift’ of the epicentre of global growth to mainland Asia, in more ways than one, have subdued what was in 1964 – when the Fund and Bank last met here – the ‘land of the rising Yen’. The ‘shocks’ administered to the global economy by the recent trans-Atlantic financial crisis have further accelerated these ‘shifts’, and the Yuan now rises where the Yen once shined.

First ‘Asian-origin’ president

While the Bank arrives in Tokyo with a South Korea-born American as its first ‘Asian-origin’ president, the Fund arrives with its first Chinese deputy managing director, who got the job as part of a deal with the European Union. This would rub even more salt into the wounded pride of a Japan that tried hard for long to get one of the top jobs and repeatedly failed because the West would not accommodate Asia till China stared it in its face.

Read the full article in The Hindu


Merkel in China

Bilateral meeting between Angela Merkel and Chinese President Hu Jintao on the sidelines of the G-20 Summit in Mexico (photo: Bundesregierung/Denzel)

Bilateral meeting between Angela Merkel and Chinese President Hu Jintao on the sidelines of the G-20 Summit in Mexico (photo: Bundesregierung/Denzel)

By Dr Sanjaya Baru, Director for Geo-economics and Strategy

German Chancellor Angela Merkel’s second visit to China in a year comes against the backdrop of dire forecasts of a difficult September for the eurozone. Mindful of such concerns and persistent pessimism in global financial markets, Merkel is now taking bold political initiatives at home and overseas. Indeed, her China trip should be seen as an effort to assert leadership across the eurozone.

At home, Merkel recently sent out a clear message to her critics that Germany must pay a price for eurozone leadership. She cautioned her colleagues against loose talk about a ‘Grexit’ – Greece’s exit from the eurozone – and assured visiting Greek Prime Minister Antonis Samaras that Germany remained committed to his country’s membership of the eurozone.

While it required courage to take such a tough stance, doing so helped to bolster her position at home and throughout the eurozone. There is now no doubt that Merkel is willing to commit Germany to the cause of preserving both the European Union and the eurozone, and that she will work to achieve that goal. If she succeeds, she will emerge as the first great European leader of the twenty-first century.  Read the rest of this entry »


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