Tuesday, December 4, 2012

The Right Balance in Asia

Kanwal Sibal 
(Advisory Board, VIF)

What impact will President Barack Obama’s re-election have on the United States of America’s strategic ties with India? It needs recalling that the US defines its strategic partnership with India very broadly, not limiting it only to hard security issues.

Cooperation in the priority areas of energy, agriculture, science and technology, education, health and information technology is viewed as generating the building blocks of the strategic partnership. The US’s stated objective is to build Indian capacities in various sectors so that India’s role in global affairs can be enhanced. The thrust of US policy in Obama’s second term should remain this.

Work on large parts of the ambitious India-US bilateral agenda remains unfinished. India’s nuclear liability legislation continues to hinder nuclear energy cooperation. The US spokesperson has identified this issue for a solution after Obama’s win. In agriculture, issues pertaining to genetically modified crops remain unsettled; in education, legislation allowing foreign universities to play a greater role in India has not yet been enacted.

With regard to obtaining easier access to US high technologies, including dual use technologies, with the loosening of export controls, Indian expectations haven’t been fully met. The hike in visa fees and denial of visas to Indian service providers are adversely affecting our information technology sector. We have moved on allowing foreign direct investment in multi-brand retail, but significant reforms in the financial and labour sectors sought by the US are awaited. Obama, who had commented critically some months ago on the reforms slow-down in India, is likely to return to the theme, particularly as his focus on economic issues in his second term might become sharper in order to bolster flagging US economic growth.

The US’s efforts to obtain a larger share of our defence procurements will continue in Obama’s second term. Already in the last seven years, the US has obtained orders worth $9 billion. This has had a political impact on our defence relations with Russia whose pre-eminent position as supplier is being eroded. India’s strategic challenge would be to keep both the Russians and the Americans reasonably satisfied.

On terrorism and homeland security, improved Indo-US cooperation will continue. Obama had begun his first term as president with uncongenial views on terrorism, Kashmir and our relations with Pakistan. His experience of Pakistani duplicity has changed the US official discourse on Pakistan’s links with terrorist groups. After declaring the Lashkar-e-Toiba a terrorist organization earlier, the US has now declared the Haqqani group as such, exposing Pakistan to the application of the US’s anti-terrorism legislation. Obama will continue to sanction drone attacks on Pakistani territory notwithstanding the strong public reaction in Pakistan. This suits our interests.

On Kashmir, Obama moved to a non-interfering position; while on Afghanistan, after initially discouraging any prominent India role there in deference to Pakistani sensitivities, the US now openly supports higher Indian engagement with that country, and co-operatively with the US where possible. In US strategic thinking today, India is seen as the economic anchor of the whole Central Asian-South Asian region, which the Americans want to integrate economically through the New Silk Road concept. In this scheme of things, the US will continue to be interested in improved India-Pakistan ties, especially economic, as this has an important bearing on the situation in Afghanistan. The US wants to lower its economic burden in maintaining stability in Afghanistan post-2014 through more trade and investment from within the region. The US will therefore continue to play hot and cold with Pakistan as the latter cannot be alienated beyond a point. This approach is reflected in the recent waiver given to Pakistan to enable economic and military aid to flow. Nevertheless, with the heightened attention the US is giving to India’s regional role, the US factor in our relations with Pakistan will continue to make easy the situation strategically for us.

Unlike China, which owes its economic and financial strength to US strategic choices in the 1970s to counter the former Soviet Union and is now seen as threatening US interests, India’s rise is not seen as a threat by the US. The flourishing US-China economic partnership has not been translated into shared political values and security understandings, which the US would have wanted for an enduring alliance of interests. India, on the other hand, shares the values of democracy, pluralism and human freedoms with the US, without as yet developing a matching level of economic collaboration. The US therefore believes India’s ascent with increased economic muscle will only strengthen the cause of democracy globally.

The US has tried to enlist India as a major component of its re-balancing policy towards Asia. China is being recognized increasingly as a strategic competitor by the US. China’s relations with its neighbours, some of whom are major allies of the US, have become tense. Its position on the South China sea reflects, apart from territorial aggrandizement, its naval ambitions. The US wants to signal its intention to maintain a balance of power in Asia, but, constrained by its financial and economic problems — which would inevitably require a reduction in its massive defence expenditure — it would rather not assume solely the burden of this strategic enterprise. It would prefer spreading it by co-opting partners like India which have their own reasons to be wary of China’s growing strength and the bilateral imbalance that has consequently emerged.

It is significant that the US’s approach to the two biggest adversaries of India has evolved positively for us. India, however, is unwilling to actively exploit this to its advantage, both because it recognizes the limits to US countervailing actions or strategies towards these two countries and India’s own independent interest in engaging them in order to dilute tensions and friction. Which is why, even as the US’s relations with China and Pakistan deteriorate, India is seeking to improve relations with both. Notwithstanding this, India gains passively from the downturn of US ties with these two countries and the simultaneous improvement of US-India relations because India’s strategic profile increases, compelling China and Pakistan to take cognizance of the new equations. This positive strategic advantage should get consolidated in Obama’s second term if we play our cards astutely.

The problem areas ahead are Iran and Syria, where it is not as yet clear how far Obama redux will go to effect a regime change through direct or indirect military action. Logic would dictate against another war with an Islamic country for geo-political reasons. But Obama has repeatedly said that Iran will not be allowed to acquire nuclear capability come what may. On Syria, he has declared that President Bashar al-Assad must go. The second term gives him political flexibility as he is not constrained to make bad choices under electoral pressure. The Iranian regime is under stress because of sanctions and may search for an honourable compromise. The beleagured Assad regime may yet collapse through stepped-up external support to the insurgency. India has distanced itself from the American position without serious bilateral contention. But if Obama decides on coercion, the US-India strategic partnership will come under some strain.

On the whole, however, Obama’s re-election will move the US’s strategic engagement with India forward.

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