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Subject: International Relations

  • Ukraine crisis is shaping future world order, India needs balanced outlook to its strategic policy

    Context

    Three back-to-back summits in the past fortnight have helped settle the dust on who stands where on the Russian invasion of Ukraine.

    Background of the summits

    • The BRICS summit took place on June 23-24, followed by the G-7 summit (June 26 and 27), and then the North Atlantic Treaty Organization (NATO) Summit in Madrid (June 29).
    • In order to understand what they portend for the future global world order, it is necessary to study the messages sent out by each of these groupings against the backdrop of the situation in Ukraine.
    • Most importantly, how can India, that has hitherto managed a careful balancing act between all the groupings, build a movement out of this moment of deep polarisation in the world?

    Why outcomes of BRICS Summit throws some challenges for the West

    • The fact that India agreed to join the summit showed India’s commitment to BRICS as an alternate grouping of economies spotlighted India’s refusal to shun Russia, and agreement to set aside the two-year stand-off with China in favour of multilateral meetings such as BRICS and the Shanghai Cooperation Organisation (SCO).
    • The BRICS Beijing Declaration was a consensus document, as each member cited differing “National Positions” on the Ukraine issue.
    • Economic initiatives: BRICS’s New Development Bank (NDB), has approved about 17 loans totalling $5 billion for Russian energy and infrastructure projects, the “Contingent Reserve Arrangement” (CRA).
    • A BRICS Payments Task Force (BPTF) for coordination between their central banks for an alternative to the SWIFT payments system, was proposed.
    • Mr. Putin also proposed building a global reserve currency based on a “basket of currencies” and trading in local currencies.
    • Challenges to western sanctions: The BRICS economic initiatives contain several challenges to the western-led sanctions regime against Russia
    • Russia also committed to providing more oil and coal supplies to BRICS countries, which will no doubt raise red flags in the West.
    • The possible admission of countries such as Argentina and Iran that have applied to the BRICS mechanism will also sound alarm in the West.

    G7 Summit and India’s flexibility

    • A day after BRICS, Mr. Modi left for the G-7 Summit in Germany, proof of India’s flexibility in dealing with both sides of the conflict.
    • In a number of statements, the G-7 targetted Russia’s war in Ukraine and China’s economic aggression.
    • Its outreach documents — on “Resilient Democracies” and “Clean and Just Transitions towards Climate Neutrality” — the only ones that India and other invitees signed on to, were devoid of any mentions of either.

    Key takeaways from NATO Summit

    • Reference to China: NATO for the first time, made a reference to “systemic competition” from China as a challenge to NATO “interests, security and values”.
    • Presence of US allies: The presence of the U.S.’s trans-Atlantic and trans-Pacific military allies at one conference sent out a clear message against a perceived Russia-China alliance.
    • US’s growing focus: The launch of another Indo-Pacific coalition — of “Partners in the Blue Pacific” (PBP), i.e., the U.S., the U.K., Australia, New Zealand and Japan, in addition to last year’s Australia-U.K.-U.S. (AUKUS), is another signal of the U.S.’s growing focus on countries that it has military alliances with, against its adversaries.
    • No consideration of Russian sensitivities: Apart from the Indo-Pacific partners at the summit, there were leaders of the five countries that have applied to join NATO.
    • The direct message was that NATO would no longer consider Russian sensitivities on the subject of NATO expansion.

    What is the strategy adopted by India?

    • The outcome of all three summits points to a growing polarisation, even battle lines being drawn, between the Western Atlantic-Pacific axis and the Russia-China combine.
    • Neutral stand on Ukraine crisis: India has adopted a singular strategy, albeit a defensive one, that does not condone Russia for its attacks on Ukraine, but one that does not criticise it either.
    • India has joined China as global economies that have most increased their intake of Russian oil, and where India continues to source fertilizer, cement and other commodities from Russia.
    • Strategic tilt towards the U.S. India is working to diversify its defence purchases from Russia, hostilities with China are high, and a strategic tilt towards the U.S. and Quad partners in the Indo-Pacific is growing.
    • Balancing Act: On the multilateral stage, too, India remains a balancing voice in the room: along with Brazil and South Africa, India ensured that the BRICS Beijing declaration did not carry the Russian position on the Ukraine war or any criticism of the West.
    • While making certain with other partners of the global South that the G-7 outreach documents carried no criticism of Russia and China.

    Way forward for India

    • It is time for New Delhi to seize the moment for leadership in a world that is becoming increasingly uncomfortable with the growing polarisation and the disruption due to the Ukraine war.
    • India is not alone.
    • At the United Nations General Assembly, for example, a majority of 141 countries voted to castigate Russia for its invasion of Ukraine, but much fewer, only 93, voted to oust Russia from the Human Rights Council.
    • This represents a large pool of independently-minded countries that do not see it in their own national interest to blandly choose one side over another.
    • India’s national interests would be better served by building a community of those like-minded countries (from South America to Africa, the Gulf to South Asia and to the Association of Southeast Asian Nations), who cannot afford the hostilities, and want to avoid the possibility of a global war at all costs.
    • In 1955, it was in such a similar moment that India took leadership along with countries such as Indonesia and Egypt at the Asian-African Conference of 29 newly independent nations, at Bandung that eventually led to the Non-Aligned Movement (NAM).

    Conclusion

    This is the time to rethink India’s role in reducing the polarisation and bringing the objective and balanced outlook Nehru spoke of, to the forefront of India’s strategic policy.

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  • Status of China’s Belt and Road Initiative in South Asia

    China has felt a need to re-visit the various projects under the BRI in different South Asian countries.

    Why in news?

    • At the recently concluded summit of G-7 leaders in Germany, US and his allies unveiled their $600 billion plan called the Partnership for Global Infrastructure and Intelligence.
    • This is being seen as a counter to China’s Belt and Road Initiative (BRI), valued at a trillion U.S. dollars by some experts.

    What is China’s Belt and Road Initiative?

    • In 2013, Chinese President Xi Jinping, during his visits to Kazakhstan and Indonesia, expressed his vision to build a Silk Road Economic Belt and a 21st Century Maritime Silk Road.
    • He then aimed to break the “bottleneck” in Asian connectivity. This vision led to the birth of the BRI.
    • The initiative envisioned a Chinese-led investment of over $1 trillion in partner countries by 2025.
    • More than 60 countries have now joined BRI agreements with China, with infrastructure projects under the initiative being planned or under construction in Asia, Africa, Europe, and Latin America.

    How does BRI work?

    • To finance BRI projects, China offers huge loans at commercial interest rates that countries have to pay within a fixed number of years.
    • The west has accused China of debt-trapping by extending “predatory loans” that force countries to cede key assets to China.
    • However, research indicates that low and middle-income countries are often the ones to approach China after not being able to secure loans from elsewhere.
    • In recent years, the BRI seems to have experienced a slowing down as annual Chinese lending to countries slimmed from its peak of $125 billion in 2015 to around $50 to 55 billion in 2021.

    What have been the BRI’s investments in Pakistan?

    • On his 2015 visit to Pakistan, Xi unveiled the BRI’s flagship project and its biggest one in a single country — the China Pakistan Economic Corridor (CPEC).
    • The CPEC envisioned multiple projects involving energy, transport and communication systems.
    • At the centre of the CPEC was the $700 million development of the city of Gwadar into a smart port city that would become the “Singapore of Pakistan”.
    • Other major projects are the orange line metro, coal power plants to tackle energy shortages and the Main Line 1 rail project from Peshawar to Karachi.

    Pace of progress in Pakistan

    • Multiple reports have shown that shipping activities at the Gwadar Port is almost negligible so far, with only some trade to Afghanistan.
    • Gwadar residents have also protested against the large security force deployed to protect Chinese nationals involved in projects.
    • Chinese nations has also became the target of multiple deadly attacks by Baloch freedom fighters.
    • Coal plants were set up and managed by Chinese firms to improve the power situation in Pakistan.
    • Chinese power firms closing down their operations as the latter did not pay dues worth 300 billion in Pakistani rupees (approximately $1.5 billion).

    What about Sri Lanka?

    • In Sri Lanka, multiple infrastructure projects that were being financed by China came under the fold of the BRI after it was launched in 2013.
    • In 2021, Colombo ejected India and Japan out of a deal to develop the East Container Terminal at the Colombo port and got China to take up the project.
    • Some BRI projects in Sri Lanka have been described as white elephants — such as the Hambantota port.
    • The port had always been secondary to the busy Colombo port until the latter ran out of capacity.
    • Other key projects under BRI include the development of the Colombo International Container Terminal, the Central Expressway and the Hambantota International Airport among others.

    Projects in Afghanistan

    • Afghanistan has not comprehensively been brought into the BRI, despite a MoU being signed with China in 2016.
    • China had promised investments worth $100 million in Afghanistan which is small in comparison to what it shelled out in other South Asian countries.
    • The projects have not materialised so far and uncertainties have deepened after the Taliban takeover last year.

    Projects in Maldives

    • Situated in the middle of the Indian Ocean, Maldives comprises two hundred islands, and both India and China have strategic interests there.
    • One of the most prominent BRI projects undertaken in the Maldives is the two km long China-Maldives Friendship Bridge — a $200 million four lane bridge.
    • Most of China’s investment in the Maldives happened under former President Abdullah Yameen, seen as pro-China.

    Projects in Bangladesh

    • Bangladesh, which joined the BRI in 2016, has been promised the second-highest investment (about $40 billion) in South Asia after Pakistan.
    • It has been able to benefit from the BRI while maintaining diplomatic and strategic ties with both India and China.
    • It has managed to not upset India by getting India to build infrastructure projects similar to BRI in the country.
    • BRI projects include Friendship Bridges, special economic zones, the $689.35 million-Karnaphuli River tunnel project, upgradation of the Chittagong port, and a rail line between the port and China’s Yunnan province.
    • However, multiple projects have been delayed owing to the slow release of funds by China.

     

     

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  • The perils of multilateralism

    Context

    At a time when the world is trying to grapple with the impact of unprecedented problems which arose in the first two decades of the 21st century, the various intergovernmental organisations and groupings, which are undergoing fundamental changes, may not be fertile places for building peace.

    Contradiction in the BRICS

    • The 14th virtual BRICS summit hosted by China (June 23-24) was a clear attempt by China to hijack the grouping, going by a blueprint it has prepared for the new world order.
    • Not a political grouping: BRICS was not meant to be a political grouping when the acronym, BRIC, was coined by Goldman Sachs economist Jim O’Neill in 2001.
    • Economic grouping: Seeing the possibility of developing a non-western global economic system, China welcomed the idea of BRICS as the nucleus of a new economic grouping and invested energy and resources in building it.
    •  Two permanent members of the Security Council together with three aspirants to permanent membership underscored the contradictions in composition.
    • No support for permanent membership: The fundamental question of support for the three countries to secure permanent membership was fossilised on China’s position that the role of the developing countries should be enhanced, implying that there shall be no expansion of the permanent membership of the Security Council.
    • But the grouping focused on possibilities of cooperation among them by developing institutions such as the New Development Bank, the BRICS Contingent Reserve Arrangement and cooperation in certain sectors.
    • India-China relations: The entire fragile framework of limited cooperation was shattered with the bloodshed at Galwan, when China unilaterally sought to alter the situation on the Line of Actual Control (LAC).
    • China showed no enthusiasm to bring India into the Asia-Pacific Economic Cooperation (APEC) even after India met the criteria of a liberalised economy.
    • Expansion for friends: The way China brought in 13 like-minded countries through the back door for a high-level dialogue on global development smacked of unfair means to expand the group with their friends.

    What was achieved by India at G7 meeting

    • India’s presence at G7 meetings are not rare and Germany invited the India to attend the G7 summit in Bavaria.
    • The G7 made its own statement on the Ukraine war on expected lines and India was only involved in other issues such as environment, energy, climate, food security, health, gender equality and democracy.
    • Since it was a war summit, it did not produce any results on other major issues.
    • Curtailing energy supplies from Russia would hurt Germany, France, Japan and others, but they could not get any exemption.
    • India’s gain has been the opportunity it got to interact with world leaders, though it was tinged with the disappointment that India, as a Quad member, did not condemn Russia’s action in Ukraine.

    Conclusion

    Multilateral negotiations will be increasingly difficult in the present chaotic global situation. It is only by working bilaterally with potential allies that India can attain the status of a pole in the new world with steadfast friends and followers.

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  • Strains on India-Russia Defence Cooperation

    As the war in Ukraine stretches over four months with no end in sight, it has given rise to apprehensions on Russia’s ability to adhere to timely deliveries of spares and hardware to India.

    History of the bilateral defence ties

    • India was reliant, almost solely on the British, and other Western nations for its arms imports immediately after Independence.
    • However, this dependence weaned, and by the 1970s India was importing several weapons systems from then USSR, making it the country’s largest defence importer for decades.

    A major chunk of India’s strategic arms

    • Russia has provided some of the most sensitive and important weapons platforms that India has required from time to time including nuclear submarines, aircraft carriers, tanks, guns, fighter jets, and missiles.
    • According to one estimate, the share of Russian-origin weapons and platforms across Indian armed forces is as high as 85%.
    • Russia is the second-largest arms exporter in the world, following only the United States.
    • For Russia, India is the largest importer, and for India, Russia is the largest exporter when it comes to arms transfer.

    What saw the decline?

    • Between 2000 and 2020, Russia accounted for 66.5% of India’s arms imports.
    • Russia’s share in Indian arms imports was down to about 50% between 2016 and 2020, but it still remained the largest single importer.

    Present status of defence cooperation

    • When the war began, Indian armed forces had stocks of spares and supplies for eight to ten months and the expectation was that the war would end quickly.
    • However, as it stretches on with no clear endgame, there are apprehensions on Russia’s ability to adhere to the timelines for both spares as well as new deliveries.
    • Armed forces are looking at certain alternative mitigation measures and identifying alternate sources from friendly foreign countries.
    • However, in the long term, this is also an opportunity for the private industry to step up production and meet the requirements.

    Impact of the war

    • While some timeline lapses and shipping delays were possible, there would not be any dent on the Army’s operational preparedness along the borders.
    • In addition, the armed forces have also made significant emergency procurements since the standoff in Eastern Ladakh and have stocked up on spares and ammunition.
    • However, Russia has assured India that it would adhere to delivery timelines.
    • Since the war sees no end, Russian industry would be caught up in replenishing the inventories of their own armed forces.

    What is the status of deals underway/new deals pending with Russia?

    • The defence trade between India and Russia has crossed $15 billion since 2018, in the backdrop of some big deals including the $5.43 billion S-400 long range air defence systems.
    • Other major contracts currently under implementation are construction of four additional stealth frigates in Russia and India,
    • There is a licensed production of the Mango Armor-piercing fin-stabilised discarding sabot (APFSDS) rounds for the T-90S tanks as also additional T-90S tanks, AK-203 assault rifles among others.

    Deferred deals in downtime

    • There are several big deals deferred by the Defence Ministry as part of the review of all direct import deals.
    • This is in conjunction with efforts to push the ‘Make in India’ scheme in defence.
    • Russian deals have also been deferred including the one for 21 MiG-29 fighter jets for the Indian Air Force (IAF) along with the upgradation of 59 existing Mig-29 jets.
    • This also includes the deferment of the manufacture of 12 SU-30 MKI aircraft by Hindustan Aeronautics Limited (HAL).

    What is the status of payments?

    • While India continues to remain Russia’s largest arms buyer with a major chunk of legacy hardware from Russia and the Soviet Union, the volume of imports has reduced in the last decade.
    • With Russia being shut out of the global SWIFT system for money transfers, India and Russia have agreed to conduct payments through the Rupee-Rouble arrangement.
    • With several big ticket deals including the S-400 under implementation, there are large volume of payments to be made.

     

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  • Russia withdraws from Snake Island

    Russian forces abandoned the strategic Black Sea outpost of Snake Island, in a major victory for Ukraine that could loosen the grip of Russia’s blockade on Ukrainian ports.

    I will give you a trick to remember countries bordering Black Sea. It is ‘GURRBUT’.

    Now please take effort to write those names of countries here.

    Snake Island

    • Zmiinyi Island, also known as Snake or Serpent Island, is a small piece of rock less than 700 metres from end to end, that has been described as being “X-shaped”.
    • It is located 35 km from the coast in the Black Sea, to the east of the mouth of the Danube and roughly southwest of the port city of Odessa.
    • The island, which has been known since ancient times and is marked on the map by the tiny village of Bile that is located on it, belongs to Ukraine.

    Why does Russia seek to control the Black Sea?

    • Domination of the Black Sea region is a geostrategic imperative for Moscow.
    • The famed water body is bound by Ukraine to the north and northwest, Russia and Georgia to the east, Turkey to the south, and Bulgaria and Romania to the west.
    • It links to the Sea of Marmara through the Bosporus and then to the Aegean through the Dardanelles.
    • It has traditionally been Russia’s warm water gateway to Europe.
    • For Russia, the Black Sea is both a stepping stone to the Mediterranean as well as a strategic buffer between NATO and itself.
    • Cutting Ukrainian access to the Black Sea will reduce it to a landlocked country and deal a crippling blow to its trade logistics.

     

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  • The significance of PM’s visit to the UAE

    Context

    Prime Minister Narendra Modi’s visit to the UAE on June 28 was his fourth, having visited the country earlier in August 2015, in February 2018 and again in August 2019.

    Why do the Gulf and UAE matters to India?

    • The UAE has given crucial support to India in the Islamic world, first by inviting our late External Affairs Minister Sushma Swaraj as a guest of honour at an OIC foreign ministers meeting in Abu Dhabi.
    • The UAE stood with us on Jammu and Kashmir following the abrogation of Article 370.
    • The Gulf is our third-largest trading partner.
    • The Gulf region is our principal source of hydrocarbons.
    • It is also a major source of foreign investment.
    • The region is home to some 8 million Indians who send in over $50 billion annually in remittances.

    Deepening bilateral ties

    • CEPA: In a virtual summit with Sheikh Mohamed in February 2022, both sides signed a Comprehensive Economic Partnership Agreement (CEPA).
    • CEPA is a significant milestone that was negotiated and finalised in just 88 days and promises to increase bilateral trade from $60 billion to $ 100 billion in five years.
    •  It is expected to help Indian exports in areas ranging from gems and jewellery and textiles to footwear and pharmaceuticals, apart from enhanced access for Indian service providers to 11 specific sectors.
    • Vision statement: An ambitious, forward-looking Joint Vision Statement titled, “Advancing the India and UAE Comprehensive Strategic Partnership: New Frontiers, New Milestones” was also issued.
    • The Dubai-based DP World and India’s National Skills Development Council signed an agreement to set up a Skill India Centre in Varanasi to train local youth in logistics, port operations and allied areas so that they can pursue overseas employment.

    New avenues for multilateral cooperation

    • The rapid normalisation of ties between the UAE and Israel following the Abraham Accords of August 2020 has also opened new avenues of trilateral and multilateral cooperation.
    • Technology, capital and scale: Some Israeli tech companies are already establishing a base in Dubai and seeking to marry niche technologies with Emirati capital and Indian scale. 
    • 2I2U: The US has announced that President Joe Biden’s forthcoming visit to West Asia will see a virtual summit of what it calls the 2I2U, a new grouping that brings together India, Israel, the US and UAE.

    Conclusion

    The UAE today is India’s closest partner in the Arab world. Both countries need to expand the areas of cooperation and deepen their engagement.

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    Back2Basics: Abraham Accords

    • The Israel–UAE normalization agreement is officially called the Abraham Accords Peace Agreement.
    • It was initially agreed to in a joint statement by the United States, Israel and the United Arab Emirates (UAE) on August 13, 2020.
    • The UAE thus became the third Arab country, after Egypt in 1979 and Jordan in 1994, to agree to formally normalize its relationship with Israel as well as the first Persian Gulf country to do so.
    • Concurrently, Israel agreed to suspend plans for annexing parts of the West Bank.
    • The agreement normalized what had long been informal but robust foreign relations between the two countries.

  • G-20 summit expected to be in Delhi

    India is expected to host the G-20 summit in Delhi, while a number of States, including Jammu and Kashmir and north-eastern States, have been asked to suggest venues for about 100 “preparatory” meetings.

    Why in news?

    • The clarifications came in response to questions being raised over reports in the media about the possibility of holding the summit itself in Jammu and Kashmir.
    • Pakistan had issued a strong protest last week, sent formal demarches to Foreign Ministries in G-20 member-states, asking them not to attend such meetings.
    • Pakistan (alone) believes J&K is internationally recognised disputed territory.

    Why such move?

    • The participation of the delegates from G-20 countries will be a major boost to the efforts of the Centre to project the situation in J&K as normal.
    • This is especially after J&K’s special constitutional position was ended in 2019.

    What is G-20?

    • Formed in 1999, the G20 is an international forum of the governments and central bank governors from 20 major economies.
    • Collectively, the G20 economies account for around 85 percent of the Gross World Product (GWP), 80 percent of world trade.
    • To tackle the problems or address issues that plague the world, the heads of governments of the G20 nations periodically participate in summits.
    • In addition to it, the group also hosts separate meetings of the finance ministers and foreign ministers.
    • The G20 has no permanent staff of its own and its chairmanship rotates annually between nations divided into regional groupings.

    Aims and objectives

    • The Group was formed with the aim of studying, reviewing, and promoting high-level discussion of policy issues pertaining to the promotion of international financial stability.
    • The forum aims to pre-empt the balance of payments problems and turmoil on financial markets by improved coordination of monetary, fiscal, and financial policies.
    • It seeks to address issues that go beyond the responsibilities of any one organization.

    Members of G20

    The members of the G20 consist of 19 individual countries plus the European Union (EU).

    • The 19 member countries of the forum are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, United Kingdom and the United States.
    • The European Union is represented by the European Commission and by the European Central Bank.

    Its significance

    • G20 is a major international grouping that brings together 19 of the world’s major economies and the European Union.
    • Its members account for more than 80% of global GDP, 75% of trade and 60% of population.

    India and G20

    • India has been a member of the G20 since its inception in 1999.

     

     

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  • G7

    Context

    The meeting of G7 leaders that concluded in Bavaria was attended by India as an observer.

    About G7

    • The G-7 or ‘Group of Seven’ includes Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.
    • It is an intergovernmental organisation that was formed in 1975 by the top economies of the time as an informal forum to discuss pressing world issues.
    • Initially, it was formed as an effort by the US and its allies to discuss economic issues.
    • The G-7 forum now discusses several challenges such as oil prices and many pressing issues such as financial crises, terrorism, arms control, and drug trafficking.
    • It does not have a formal constitution or a fixed headquarters. The decisions taken by leaders during annual summits are non-binding.
    • Canada joined the group in 1976, and the European Union began attending in 1977.
    • The G7 is trying hard not to be yesterday’s club.
    • It is still a powerful grouping, with seven of its members in the top 10 economies of the world, three of them permanent members of the UNSC.

    Important outcomes of the G7 meeting

    • Statement on support for Ukraine: A standalone G7 Statement on Support for Ukraine was issued.
    • There was an unconditional commitment that the grouping will provide financial, humanitarian, military and diplomatic support and stand with Ukraine for as long as it takes.
    • Russia was also warned that any use of chemical, biological and nuclear weapons would be met with severe consequences.
    • Further intensification of sanctions against Russia was contemplated.
    • Tough language on China: Significantly, the G7 final communique has tough language on China as well.
    • It says there is no legal basis for China’s expansive maritime claims in the South China Sea, it calls on China to press Russia to withdraw troops from Ukraine and expresses grave concern about the country’s human rights situation.
    • It calls on China to respect universal human rights and fundamental freedoms in both Tibet and Xinjiang, highlighting the issue of forced labour in the latter.

    Significance of India’s observer status

    • The fact is that even the G7 knows its clout has declined compared to, say, 20 years ago.
    • That explains the move to invite key G20 countries as observers to its summits.
    • As for India, its importance lies in the undeniable truth that no global problem can be seriously tackled without New Delhi’s involvement.
    • For India, G7 summits have always been an invaluable opportunity to exchange views not just in a plurilateral format but also in the bilateral meetings on the margins of the main meetings.
    • 2 statements: India has lent its name to two statements issued by the G7. One is titled “Resilient Democracies Statement” and the other is “Joining Forces to Accelerate Clean and Just Transition towards Climate Neutrality”.
    • The first statement talks of democracies as reliable partners seeking to promote a rules-based international order and supporting democracy worldwide including through electoral assistance.
    • The other statement to which India is a signatory is the one on clean and just transition towards carbon neutrality.

    Conclusion

    India’s participation in this meeting as an observer serves to advance its foreign and security policy objectives and will keep it in good stead when it assumes the G20 presidency in December.

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  • China’s interventions in the Horn of Africa

    China recently held the first China-Horn of Africa Peace, Governance and Development Conference.

    Why in news?

    • China has been investing across the African continent throughout the last decade.
    • The conference held in Ethiopia witnessed the participation of foreign ministries from the following countries of the Horn: Kenya, Djibouti, Ethiopia, Sudan, Somalia, South Sudan, and Uganda.

    Major objectives

    • No doubt that china predates small nations with debt-trapping the countries.
    • It focuses on increasing the infrastructural investments in African countries and converting them to security assets.
    • It asserted three objectives in Africa:
    1. Controlling the pandemic
    2. Implementing a Forum on China-Africa Cooperation (FOCAC) outcomes, and
    3. Upholding common interests while fighting hegemonic politics

    What is FOCAC?

    • The FOCAC promotes China’s role in the infrastructural and societal development of the Horn.
    • In the 2021 forum, the entire region of the Horn participated and four resolutions were adopted:
    1. Dakar Action Plan
    2. China-Africa Cooperation Vision 2035
    3. Sino-African Declaration on Climate Change
    4. Declaration of the Eighth Ministerial Conference of FOCAC

    How has China garnered goodwill in HOA?

    • HOA have benefited from China’s vaccine diplomacy.
    • Beijing has also initiated the “2035 vision for China-Africa cooperation”; it aims to transform the health sector, alleviate poverty, promote trade and investments, and expand digital innovation.
    • The vision also focuses on green development, capacity building, improving people-to-people exchanges and facilitating peace and security in the continent.

    What are China’s primary interests/investments in the Horn of Africa?

    China’s interests are related to four major areas: infrastructural projects, financial assistance, natural resources and maritime interests.

    (1) Infrastructure

    • Looking at Chinese investments in infrastructure, one of its landmark projects was fully funding the $200 million African Union headquarters in Addis Ababa.
    • It has also made significant investments in railways; it is building the Addis-Djibouti railway line connecting the land-locked country with Eritrean ports in the Red Sea.
    • China has also invested in the Mombasa-Nairobi rail link in Kenya, and has already delivered on railway projects in Sudan.
    • It also has a viable military hardware market in Ethiopia and has built over 80 infrastructural projects in Somalia, including hospitals, roads, schools and stadiums.

    (2) Debts and ‘assistances’

    • With respect to financial assistance, Ethiopia, is one of the top five African recipients of Chinese investments, and also has a debt of almost $14 billion.
    • China accounts for 67% of Kenya’s bilateral debt.
    • In 2022, China promised to provide $15.7 million assistance to Eritrea.

    (3) Mineral explorations

    • The third major Chinese interest in Africa is the presence of natural resources — oil and coal. Beijing has invested $400 million in Mombasa’s oil terminal.
    • China is also interested in minerals such as gold, iron-ore, precious stones, chemicals, oil and natural gas in Ethiopia.
    • South Sudan, a source for petroleum products, has had continued Beijing investment in the industry since the latter’s initial entry in 1995.

    (4) Maritime interest

    • China’s first and only military base outside its mainland is in Djibouti.
    • During his visit in early 2022, Wang hinted at China’s willingness to develop Eritrea’s coast which would connect to China’s investments in land-locked Ethiopia.
    • The US has speculated that China wishes to build another military base in Kenya and Tanzania, thereby increasing its military presence in the region.

    Has the Horn of Africa been welcoming of China’s presence?

    • Africa has been keen on interacting with China.
    • Despite the wariness surrounding China’s projects in Africa, the governments have mostly been welcoming.
    • When conflict broke out in Tigray in November 2020, Addis Ababa appreciated Beijing for respecting Ethiopia’s sovereignty.
    • In December 2021, Kenya defended Chinese projects in the country; President Uhuru Kenyatta maintained that China-Africa partnership was mutually beneficial.
    • Similarly, in May 2022, the East African Community (EAC) welcomed Chinese investors to work in East Africa for the prosperity of the people.

    Beijing’s principle of non-intervention

    • Peace and stability is a mutual requirements for China and Africa.
    • For Africa, Chinese investments could lead to stable environments which could help the countries achieve their peace and development objectives.
    • For China, conflict in the region comes at a heavy cost.
    • In Ethiopia. when the conflict broke out, over 600 Chinese nationals, working on different projects, were evacuated, putting several investments at risk.
    • From a trading perspective, the region plays a significant role in achieving the objectives of the China-Africa Cooperation Vision 2035.

    Why is HOA important?

    • In the last decade, the region lying between Suez Canal and the Seychelles has emerged as a new geopolitical hotspot.
    • It has factors like impressive economic growth of regional countries, emergence of new security threats, and the ensuing major power rivalry driving the strategic trajectory of the region.
    • The straits of Bab el-Mandeb, which lies at the heart of this region, connects the energy-rich Middle East to Europe and, along with the Suez Canal, is considered a jugular vein for global trade.

    Indian footprints in the region

    • India has been paying greater attention to the region but still lags behind China.
    • India has bolstered defence cooperation with Oman and France (which holds territories in the Southwestern Indian Ocean).
    • It has signed logistics support agreements with these countries to ensure greater naval access in the region.
    • Reportedly, India was in talks with Japan to grant access to Indian naval vessels at the Japanese base in Djibouti.
    • India has also sought to open a military base in the Seychelles and plans to further enhance its naval presence in the Western Indian Ocean.

    These efforts are directed to increase Indian leverage and limit Chinese influence in the region.

    Lessons for India

    • China’s move towards peace in Africa indicates a shift in its principle of non-intervention.
    • It is China’s message that its presence in the continent has a larger objective and is not likely to be limited to the Horn of Africa.
    • This includes an aim to project itself as a global leader and boost its international status.
    • Further, the recent developments imply that China is focussing on a multifaceted growth in the continent for the long run.

     

     

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  • PM visits United Arab Emirates (UAE)

    PM Modi expressed gratitude to President of the United Arab Emirates Sheikh Mohamed bin Zayed (MBZ) al Nahyan for taking great care of 3.5 million Indian community in the UAE during the pandemic.

    India- UAE Relations: A backgrounder

    • The relation has greatly flourished especially after the accession of H. H. Sheikh Zayed Bin Sultan Al Nahyan, as the ruler of Abu Dhabi in 1966.
    • The greater push has been achieved in bilateral relations when the visit of Indian PM’s to the UAE in August 2015.
    • It marked the beginning of a new strategic partnership between the two countries.
    • Further, the Crown Prince was invited in January 2017 as the chief guest at India’s Republic Day celebrations.
    • In 2017 the two sides signed the agreement on Comprehensive Strategic Partnership (CSP).

    Significance of ties

    • Indian Diaspora in UAE: Around 3 million Indians are living harmoniously in the UAE.
    • UAE – A willing partner: As India seeks to enhance economic engagement and deepen security cooperation with the Gulf, it finds a willing partner in the UAE.
    • India being a natural partner: UAE’s ‘Look East’ find partners for its economic growth and with security concerns emanating from turmoil in West Asia and growing threat from terrorism.
    • Investments: UAE has a special place due to its business-friendly atmosphere, willingness to invest in the Indian economy.
    • India’s West Asia policy: The UAE occupies a key place in India’s West Asia policy. The high-level visit from both sides has given a new impetus to this partnership.

    Why UAE is tilting toward India?

    • Turmoil in West Asia: Geopolitical conditions as Iran is threatening continuously to close the Strait of Hormuz in case there is a conflict with Saudi Arabia or US.
    • Disappointment from Pakistan: UAE saw Pakistan as a partner and incorporated a deep economic and security relationship with it. But in the present day, Pakistan does not seem to be of much help to UAE.
    • India as a market: India is an important destination for oil and energy purchase. UAE also recognizes exhaustible nature of its fossil fuel reserves.
    • Returns on investment: UAE’s massive sovereign wealth funds can act as a great resource in the development of infrastructure in India.
    • Addressing Terrorism: There has been a rising convergence between India and UAE on the terror issue and both the countries talked of the need to combat terror groups without any discrimination.
    • Lack of regional consensus: Countries like Syria, Iraq, Libya and Yemen are suffering from violent conflicts. The Gulf Cooperation Council (GCC) has not produced expected results.

    Economic Significance of the UAE

    • UAE, due to its strategic location, has emerged as an important economic centre in the world.
    • In recent years, the UAE, through its ‘Vision 2021’, has sought to diversify its economy and reduce its dependency on oil.
    • Although the UAE has diversified its economy, the hydrocarbon sector remains very important followed by services and manufacturing.
    • Within services, financial services, wholesale and retail trade, and real estate and business services are the main contributors.

    India-UAE trade and investment ties

    • India is UAE’s third largest trade partner after China and the United States.
    • The UAE accounts for 8 percent of India’s oil imports and was fifth largest supplier of crude oil to India.
    • The aim is to boost bilateral merchandise trade to above U.S.$100 billion and services trade to U.S.$15 billion in five years.
    • As we are witnessing a big turnaround in manufacturing, the UAE would be an attractive export market for Indian electronics, automobiles, and other engineering products.
    • The UAE’s investment in India is estimated to be around U.S.$11.67 billion, which makes it the ninth biggest investor in India.

    Advanced technology and the knowledge economy

    (1) Technology

    • In 2018, India and UAE signed a MoU to generate an estimated $20 billion in the span of a decade.
    • The Emirates have stepped up efforts to invest in the development of the knowledge economy by expanding the “golden visa”.
    • Space is a new arena in which India and the UAE have collaborated through the work of the UAE Space Agency (UAESA) and the Indian Space Research Organization (ISRO).
    • Space cooperation between India and the UAE gained quick momentum during PM Modi’s visit to the Emirates in 2015.
    • The two countries are likely to work together on Emirates’ ‘Red planet Mission’.

    (2) Security and Defence Cooperation

    • Another significant pillar of India-UAE ties is reflected in their growing cooperation in security and defense sector.
    • With the spread of radicalism in Gulf and South Asia, India looks to enhance security cooperation with UAE to counter terrorist threats and combat radicalization.
    • ‘Desert Eagle II’, a ten day air combat exercise, was held between the air forces of India and UAE.

    Way Forward

    (1) Needs to ensure the execution of the investment projects with the required expertise

    • Potential areas to enhance bilateral trade include defence trade, food and agricultural products as well as automobiles.
    • Indian companies with expertise in renewable energy sector can invest in UAE.
    • In defence sector, there is a need to further enhance cooperation through joint training programmes.

    (2) Manifold Benefits of India-UAE Trade Agreements

    • With India’s newfound strength in exports, a trade agreement with an important country such as the UAE would help sustain the growth momentum.
    • As we are witnessing a big turnaround in manufacturing, the UAE would be an attractive export market for Indian electronics, automobiles, and other engineering products.

    (3) Improving the relations with the GCC

    • As part of the GCC, the UAE has strong economic ties with Saudi Arabia, Kuwait, Bahrain, and Oman and shares a common market and customs union with these nations.
    • This FTA with the UAE will pave the way for India to enter the UAE’s strategic location, and have relatively easy access to the Africa market and its various trade partners.
    • This can help India to become a part of that supply chain especially in handlooms, handicrafts, textiles and pharma.

    (4) Solving the issue of UAE’s Non-Tariff Barriers (NTBs)

    • The UAE tariff structure is bound with the GCC (applied average tariff rate is 5%), therefore, the scope of addressing Non-Tariff Barriers (NTBs) becomes very important.
    • The reflection of NTBs can be seen through Non-Tariff Measures (NTMs) mostly covered by Sanitary and Phytosanitary (SPS) and Technical Barriers to Trade (TBT).

     

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