The situation in eastern Ladakh may be deadlocked, but China’s regional challenge is not about to go away. Actually, what it reveals is that the issue is not so much about 10-20 km in an inhospitable area, but the larger geopolitical confrontation between India and China.
We have been seeing important developments in Bangladesh and Sri Lanka in recent months. In June, Dhaka asked Beijing for funds for nine new projects worth $6.4 billion, including for a new port at Payra, the Barisal-Bhola bridge and a technology park. During Xi’s 2016 visit, the two countries had signed an MoU for implementing infrastructure projects worth $24 billion. Chinese investment plans announced then included 27 MoUs worth $24 billion and 13 joint ventures valued at $13.6 billion.
New Delhi must work out a positive agenda in the region, rather than being seen as a naysayer that knows what it doesn’t want, but has no idea of what it does.
But the real sign of the times has been the report that Bangladesh is considering a proposal from China on the management and restoration of the Teesta river that flows down from Sikkim and West Bengal into the country.
A deal with India on the sharing of Teesta waters has been in the works for a decade, with little progress. Opposition by CM Mamata Banerjee at the last minute prevented a deal from being signed in 2011. The drop in water levels of Bangladesh’s fourth longest river during the summer months because of irrigation canals and dams upstream, has caused a great deal of unhappiness in the country. The problem is not easy to resolve because it is the outcome of farmers on both sides wanting to cultivate an additional crop of paddy in the dry season.
The Bangladeshi project of water management involves building embankments on both sides of the river till its confluence with the Brahmaputra and involves a cost of nearly $1 billion, of which 85 per cent will come from China, including the expertise in designing and executing it.
As in all Chinese projects, fears have been raised about a debt trap but these are probably overstated. An August paper by Lee Jones and Shahar Hameiri of Chatham House has debunked the notion that China is using “debt trap diplomacy” to further its interests. China’s involvement in a river management project with a country that shares as many as 54 rivers with India is not good news. As it is, the Teesta project is in an area adjacent to the sensitive Siliguri corridor.
Take Sri Lanka. Last week, President Gotabaya Rajapaksa made an emphatic defence of China’s projects in Sri Lanka, denying that they are in any way part of a debt trap setup of China. He said the two countries planned to go ahead with their cooperation and even restart talks on a free trade agreement.
The Rajapaksas have been emphasising that Sri Lanka has an ‘India first’ policy, as evidenced by the virtual summit between Prime Minister Mahinda Rajapaksa and PM Narendra Modi recently. Mahinda’s brother Gotabaya, who was elected President in November last year, too, ensured that New Delhi was his first port of call. But New Delhi should be aware that this is just a bit of positioning by the Rajapaksas who have no love lost for India.
Last week, state councillor Yang Jichei visited Sri Lanka and held meetings with the two brothers. China has sanctioned a new loan worth $500 million to help Sri Lanka cope with the pandemic. Sri Lanka already owes some $5 billion to China and is looking for a loan moratorium, just as it wants with New Delhi. China is currently involved in building Sri Lanka’s ambitious Port City project being constructed by a subsidiary of the China Communications Construction Company (CCCC) which was placed under sanctions by the US recently.
China considers Sri Lanka as a vital link in the maritime component of its BRI. Of late, the US has also begun wooing Sri Lanka. Last year, Sri Lanka got a $480 million loan from the US for building its infrastructure. Washington is also seeking a status of forces agreement with Colombo. One outcome of the talk on debt traps was that following Yang’s visit, China announced a $90 million grant to be used for medical care, education and water supplies by Sri Lanka.
Another area that needs attention from India is Southeast Asia. China has just started a diplomatic drive to win over Southeast Asian countries. This week, Foreign Minister Wang Yi will visit Cambodia, Malaysia, Laos, Thailand and Singapore. In June, the ASEAN surpassed the EU as China’s largest trading partner. In an era when supply chains are being rejigged, having those which are nearby is a great advantage. RCEPs passage will only deepen these linkages.
India’s Look East and Act East policy have been premised on closer ties with the ASEAN. In 2018, 10 ASEAN leaders attended the Republic Day parade as chief guests. But instead of an effective follow through, ties have been regressing. At the last minute, New Delhi decided to stay out of the RCEP. And to add insult to ASEAN injury, it has been seeking a review of its FTA with ASEAN as part of a larger renegotiation with Japan and South Korea as well. New Delhi needs to work out a positive agenda across the board, rather than being seen as a naysayer that knows what it doesn’t want, but has no idea of what it does.
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