China’s “String of Pearls” and India's Two Front War Predicament : Analysis


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Dec 3, 2017
Maldives: Countering Chinese Challenges in Indian Ocean


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Dec 3, 2017
India on board with US-Maldives alliance to counter China
COLOMBO -- A defense agreement the U.S. government signed with the Maldives this month is a sign of shifting geopolitical tides in a strategic stretch of the Indian Ocean once dominated by India, South Asia's main power.

Unlike a similar initiative seven years ago, the new framework for cooperation between the U.S. and Maldivian departments of defense went through without objection from India, a leading player in the latest version of the South Asian Great Game in which China, Japan and the U.S. are contesting for influence.

In 2013, New Delhi succeeded in sinking U.S. plans for a status of forces agreement with the Maldives, an archipelago in the Indian Ocean best known for high-end tourist resorts. The agreement was meant to provide a framework for existing U.S.-Maldives defense activities and not to create a "new military presence," Washington said at the time.

The government of President Ibrahim Mohamed Solih has struck a new note from one of its recent predecessors under President Mohamed Waheed. After signing the agreement, the Maldivian defense ministry tweeted: "[It] will add immense value to the excellent #US-#Maldives partnership defined by shared principles and interests in peace and security of #IndoPacific and #IOR amid rising threats like piracy and terrorism."

The message was a nod by the Maldives, South Asia's smallest nation, to the broader context of the agreement. "IndoPacific" referenced the U.S. Free and Open Indo-Pacific strategy President Donald Trump has rolled out for the U.S. in the Pacific and vast stretches of the Indian Ocean. And "IOR", the Indian Ocean Region, is where India has major strategic concerns.

India is also part of Quad, an alliance that includes Australia, Japan and the U.S. They have held security dialogues and military exercises spanning the Pacific and Indian Ocean.
Australian and U.S. naval ships conduct a resupply exercise in the strategically vital Indian Ocean. © Getty Images
According to Alaina Teplitz, the U.S. ambassador to the Maldives and Sri Lanka, the agreement paves the way for the Maldives to join other nations with "a shared responsibility to uphold the rules and values ensuring a free and open Indo-Pacific."

The Maldives National Defense Force (MNDF) will be a direct beneficiary of Washington's push. It has only 20,000 troops, making it one of the region's smallest armies.

"This agreement advances high level dialogues, builds partner capacity, and increases interoperability with our partners in the Maldives National Defense Force," Teplitz, who is based in Colombo, the Sri Lankan capital, told the Nikkei Asian Review.

"MNDF representatives joined more than 20 other partner militaries to enhance humanitarian assistance and disaster relief capabilities during the 2019 Pacific Amphibious Leaders Symposium," she added. "They've trained with U.S. Marines on defense tactics, and conducted emergency medical exercises with the U.S. Air Force."

South Asia analysts reckon that India's change of tack, which made possible the U.S. defense engagement in the Maldives, marks a turn in deepening India-U.S. bilateral ties and New Delhi's "perceptions of an American role" in the Indian Ocean region.
President Ibrahim Mohamed Solih of the Maldives was welcomed by India's Prime Minister Narendra Modi to New Delhi in December 2018. © Reuters
"Deep strategic ties between India and the U.S. are reflected in India's centrality in the Indo-Pacific strategy," said Aparna Pande, director for the Initiative on the Future of India and South Asia at the Hudson Institute, a Washington-based think tank.

The closer military ties and expanding U.S. support for India's strategic interest against Pakistan, its regional nemesis, has "helped assuage Delhi," she told Nikkei. "Now Delhi views Washington's presence in Sri Lanka, the Maldives, Bangladesh or Nepal as aligned with India's strategic interests -- [and] no longer the Cold War era when the U.S. was viewed as an offshore balancer and pro-Pakistan."

China's expanding shadow in a stretch of the Indian Ocean that India regards as its backyard has precipitated this maritime fault line. President Abdulla Yameen tilted the Maldives towards China during his five years in power that ended in 2018. Beijing pumped in millions of dollars to fund an infrastructure spree during Yameen's time in office, leaving the country's $5 billion economy with at least $1.4 billion in debts, according to official estimates. Allies of Solih estimate the Chinese debt to be closer to $3.5 billion, which the Chinese government disputes.
Abdulla Yameen, left, president of the Maldives for five years until 2018, took the smallest nation in South Asia much more into China's orbit. © Reuters
Yameen's years were also marked by an authoritarian turn mirrored not far off in Sri Lanka, which also took on multi-billion dollar Chinese-funded infrastructure projects as part of Beijing's flagship Belt and Road Initiative that also eroded India's influence over the strategic South Asian island.

"China does provide a different context to security in the Indian Ocean," Nilanthi Samaranyake, director of strategy and policy analysis at the Center for Naval Analysis, a Washington-based think tank, told Nikkei. "The fact that India is now supportive of [the U.S.-Maldives security agreement] is a distinct change due to its increased threat perceptions of China."

She expects the security framework to pave the way for a more comprehensive bilateral defense and security dialogue between the U.S. and the Maldives: "The U.S. generally seeks to advance defense cooperation with non-allied partners and build incrementally."

Washington's foray in the Maldives has not gone unnoticed in China.

"Great powers should no longer engage in setting their spheres of influence," Long Xingchuan, a senior research fellow with the Academy of Regional and Global Governance at the Beijing Foreign Studies University, wrote in a commentary in Global Times, an English-language mouthpiece for the ruling Chinese Communist Party. "In the 21st century, countries should adhere to free, equal and mutually beneficial cooperation."


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Dec 3, 2017

Maldives and Japan signs Exchange of Notes on the assistance to be extended to Maldives Coast Guard​

The Maldives and Japan today signed the Exchange of Notes under the Economic and Social Development Programme of the Government of Japan, for a grant aid of 800 million Japanese Yen (USD 7.6m) to be extended to the Maldives Coast Guard and the Maritime Rescue and Coordination Center.

At the ceremony held today at the Ministry of Foreign Affairs, the Exchange of Notes were signed on behalf of the Government of Maldives by His Excellency Abdulla Shahid, Minister of Foreign Affairs, while Her Excellency Keiko Yanai, Ambassador of Japan to the Maldives signed on behalf of the Government of Japan.

The grant aid will be utilized to further strengthen the capabilities of the Maldives Coast Guard, the Maritime Rescue and Coordination Center, Sub-Regional Centers and Vessels. This includes the provision of communications equipment, professioanl search and rescue dive equipment to be used by the Maldives Coast Guard during search and rescue operations.

While speaking at the ceremony today, Minister Shahid highlighted the close relations the Maldives enjoys with Japan, and the need for coordinated action in collaborating more closely on combating piracy, countering violent extremism and narco-trafficking, and to ensure a free and open Indian Ocean that would bring about peace and prosperity to the region. Minister Shahid also thanked Ambassador Yanai for her committment to further enhance the close relations between Maldives and Japan, and expressed his gratitude to the Government of Japan for yet another important gesture of goodwill and generosity to the Maldives.

Senior officials from the Ministry of Foreign Affairs, the Maldives National Defence Force, Japan International Cooperation Agency (JICA) and the Embassy of Japan attended the signing ceremony today.

The signing of the Exchange of Notes symbolises the close ties and coordination between the two countries on rescue services and crisis management. In October last year, Japan donated 21 paremedic ambulances to the Maldives health sector in value of USD 1.4 million, which were distributed to 21 islands in 15 atolls.
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Dec 3, 2017

Govt. to sign swap deal with China for US$ 1.5 billion; India deal unlikely​

Sri Lanka will next week sign an agreement with China’s Central Bank — the People’s Bank of China — for a swap arrangement amounting to US$ 1.5 billion.

The move came as the Government is looking at measures to bridge the gap of another US$ 1 billion. The Sri Lankan Central bank was expecting this from India, but it is now unlikely, a senior Central Bank official said.

Under the swap arrangement with China, the funds are expected to be made use of to maintain the foreign reserves and for imports from China, the official said.

The money is to be paid back within three and half years.

A currency swap is a transaction in which two parties exchange an equivalent amount of money with each other but in different currencies. The parties are essentially loaning each other money and will repay the amounts at a specified date and exchange rate.

Sri Lanka’s request to the Reserve Bank of India for a currency swap of US$ 1 billion has so far drawn no response and the facility was unlikely to be received now, the official said.

He said that in view of the shortfall, the Central Bank was taking other measures including negotiating similar swap arrangements with other countries while continuing with other measures such as reducing imports.

Vehicle import restrictions were among the measures and will be continued until further notice, he added.

The Chinese swap arrangement would be useful to maintain a balance throughout the year, he said.

Meanwhile, Sri Lanka plans to review eight trade agreements including two which have been stalled midway.

The controversial Indo-Sri Lanka Economic and Technology Cooperative Agreement (ETCA) and the China-Sri Lanka Free Trade Agreement which were stalled would be reviewed with the objective of renegotiating them, Trade Minister Bandula Guanwardena said.

The China FTA talks were halted in 2017 after six rounds of discussions while the ETCA was suspended in 2018 after 12 rounds of discussions.

Another trade agreement with Thailand would also be reviewed.

The India-Sri Lanka FTA effective from 2000 and the Pakista- Sri Lanka FTA effective from 2005 are among other agreements to be reviewed.

Mr Gunawardena said the objective of reviewing the agreements was to ensure that Sri Lanka benefited from the agreements currently in place as well the proposed agreements.

“If there are clauses which are not beneficial to the country, we need to revise them,” he said .

The minister said a Commerce Department team along with an expert committee would review the agreements.
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Dec 3, 2017

Sri Lanka opposition, civil society mount legal challenge to Chinese-backed Port City Bill​

Filing about a dozen petitions at Sri Lanka’s Supreme Court on Thursday, opposition parties, civil society groups, and labour unions challenged a recently-gazetted Bill on the Chinese-backed Port City in capital Colombo, arguing it “directly affects” Sri Lanka’s sovereignty. The cases are scheduled to be heard by the top court on Monday.

The ruling Rajapaksa administration tabled a Bill, titled Colombo Port City Economic Commission’, in Parliament last week, outlining proposed laws for the $1.4 billion-Port City being built on reclaimed land at Colombo’s seafront.

Constitutional validity​

However, Sri Lanka’s Opposition parties Samagi Jana Balawegaya (SJB or United People’s Front), Janatha Vimukthi Peramuna (JVP), the United National Party (UNP), Colombo-based NGO Centre for Policy Alternatives, and labour organisations have challenged the constitutional validity of the proposed legislation for the Port City, touted by the government as an investment hub for foreign capital.

SJB legislator Harsha de Silva said while the party wants the Port City project to succeed, for its potential to “catalyse” the next stage of fintech and high-end knowledge services-driven growth in the country, “a solid legal framework” was key. “For this long-term project to succeed it must be consistent with the Constitution of Sri Lanka. It must not be discriminatory…we see multiple clauses that are inconsistent with the Constitution,” he told The Hindu.

Senior lawyer and SJB Legal Secretary Thisath Wijayagunawardane said the Bill seeks to set up a Commission whose powers — in regard to registrations, licensing and authorisation — “interfered” with the provincial authority, and allowed for a team of foreigners, “accountable to none other than the President”, to effectively run the Port City.

“The clauses prohibit investment in the Port City in Sri Lankan rupees, which will keep out Sri Lankans…it will be like a forbidden city within Colombo,” he said, adding: “The government claims it stands for ‘one country, one law’, but the Bill allows for running the Port City like a foreign country with special laws.”

Terming the project as one of “national importance”, the UNP said the Bill was “inconsistent with Parliament’s control over public finances, allows for the abuse of power and fails to ensure a transparent system of checks and balances”.

Eyeing investments​

The Port City was launched by President Xi Jinping during his state visit to the island nation in September 2014, during former President Mahinda Rajapaksa’s second term in office, months before his poll defeat. The successor government, led by President Maithripala Sirisena and PM Ranil Wickremesinghe, vowed to develop the site into an “Indian Ocean financial hub”, despite an election promise to scrap it, and amid protests from environmentalists and fisherfolk.

Following their return to power, the Rajapaksa administration promised to expedite the project, that it says would attract $ 15 billion in investments, and emerge a “leading business, retail, residential and tourist destination in South Asia”.

Sharp criticism​

However, in addition to the legal challenge, the government also faces sharp criticism from some of its backers, including sections of Sri Lanka’s influential Buddhist clergy. “We will not allow Sri Lanka to become a Chinese Colony,” Chief Incumbent of the Abhayarama Temple in Colombo, Ananda Muruththettuwe Thero, said on Thursday. “It is clear the country is heading on the wrong path,” he said.

Months ago, Buddhist monks, among others, fiercely opposed Indian involvement at the East Container Terminal at the Colombo Port, forcing President Gotabaya Rajapaksa to go back on his announcement that the Adani Group would invest in the project, along with the Sri Lanka Ports Authority. Subsequently, Colombo offered the West Container Terminal to the Group.

Meanwhile the Ceylon Federation of Labour voiced concerns over the Bill exempting employers operating within the Port City from compliance with Sri Lanka’s labour laws. The Union had fought and won a case in the late 1970s when the J.R. Jayawardene government tried to deny labour law protection to workers at the newly established Free Trade Zone.

The country’s hard-won labour protective legislation had come under threat again, Federation General Secretary T.M.R. Raseedin said in a statement, cautioning that: “Should this Bill be enacted, we will be going back to an era when ‘hire and fire’ ruled employer-employee relationships.”


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Dec 3, 2017

India proves diplomatic heft in Sri Lanka’s $700M deal​

India’s front-channel economic diplomacy has paid dividends.

The Adani group on Thursday signed a $700-million agreement with the Sri Lanka Ports Authority (SLPA) and conglomerate John Keells Holdings, to develop and manage the Colombo West International Container Terminal. The three parties have signed a build-operate-transfer (BOT) agreement spanning 35 years.

With this deal, the Adani group becomes the largest foreign investor in the island nation’s ports sector.

The move comes after intense lobbying by India, which began in January this year, when Foreign Minister S Jaishankar impressed upon the Gotabaya Rajapaksa government to expedite finalising the deal.

``This is a brilliant diplomatic triumph. Indian diplomacy is not abrasive even when harsh words were said about India in Sri Lanka. It is paying dividends now,” former Indian Ambassador Deepak Vohra said.

``The Indian Ocean is India’s, not China’s sphere of influence,” he told Moneycontrol.

Within two weeks of Jaishankar’s visit, President Rajapaksa publicly announced in Colombo that 49 per cent of the investment will come from the “Adani Group and other stakeholders”.

That was said earlier this year, in January. At the time of signing of the deal, after the passing of these many months, the share of investment from Adani and its local partner has gone up to 85 percent with SLPA bringing in the remaining 15 percent.

India for long has deeply resented China’s attempts to make its presence felt in the Indian Ocean. Sri Lanka has proved to be the principal conduit for Beijing’s trepidations in an area which New Delhi regards as its own sphere of influence.

While the main bone of contention has been Colombo’s handing out the Hambantota International Airport to China by the previous Maithripala Sirisena government on a 99-year lease, India and Japan have also conveyed their displeasure earlier this year over being ejected out of a project to jointly develop the East Container Terminal (ECT). It was seen in conjunction with the Rajapaksa government’s decidedly pro-China tilt.

Since then, New Delhi has worked up channels in Colombo, using close ethnic ties between the two countries to clinch the deal.

Besides the diplomatic push, Sri Lanka’s dire economic situation was also a reason to get Adani on board. President Rajapaksa declared an 'economic crisis' on September 1 amid an unprecedented inflation and plummeting currency and forex reserves.

In the midst of this, the Hambantota Airport deal with China can be a particularly bad reminder. According to a 2020 article by the Lowy Institute, the airport deal has been portrayed as the "case par excellence" for China's debt-trap diplomacy.

The term `debt-trap diplomacy’ describes China's predatory lending practices in which poor countries are overwhelmed with unsustainable loans and forced to cede strategic leverage to China. Sri Lanka already owes more than $5 billion to China from past loans.
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Dec 3, 2017

India delivers 100 tonnes of nano fertilizer to Sri Lanka​

Two Indian Air Force planes carrying 100 tons of Nano Nitrogen liquid fertilizers landed in Colombo on Thursday.

Taking to Twitter, Indian High Commission in Sri Lanka said that the delivery was in response to a call by the Sri Lankan government for urgent support in airlifting nano fertilizers.

"On the day of #Deepawali, the Festival of Lights,#indianairforce once again brought ray of hope to #SriLanka. Responding to GoSL's call for urgent support in airlifting nanofertilizers from #India,2 @IAF_MCC planes arrived in #Colombo carrying 100 tons of the product today," Indian High Commission here tweeted.

The import of Nano nitrogen liquid fertiliser came months after Sri Lankan President Gotabaya Rajapaksa's decision in May to stop chemical fertilizer imports.

Sri Lanka is facing a severe shortage of fertilizers after the ban. India has stepped in to speed up the supply of nano fertilizer to Sri Lanka.

India sends in 100 tonne fertiliser to Sri Lanka amid Colombo's row with China over contamination​

India has sent 100 tonnes of Nano Nitrogen fertiliser to Sri Lanka in the backdrop of latter barring the use of contaminated Chinese fertilisers.
Sri Lanka had barred shipment of Chinese organic fertiliser after it was found to be contaminated with bacteria, a development that has miffed Beijing which was quick to blacklist People’s Bank of Sri Lanka in a quid pro quo move. The People's Bank is the second largest commercial bank in Sri Lanka.

Indian supplies reached on two Indian Air force Globemaster aircraft on Thursday, which was Diwali day. The supplies were requested by Sri Lankan government.

A release by the Indian high commission in Colombo said, "the deployment was essentially to support the government of Sri Lanka's initiative towards organic farming and to expedite availability of Nano Nitrogen fertiliser to the Sri Lankan farmers".

The C17 aircraft operations were coordinated in close liaison with Sri Lanka Air Force.

The Indian mission pointed out that the close coordination between the two services led to the "quick deployment....and expeditious disembarkation" of IAF aircraft.

The Indian crew was received by Chief of Staff, Sri Lanka Air Force AVM Prasanna Payoe.

This is not for the first time that New Delhi has reached out to Colombo as part of its "Neighbourhood First' policy" and 'First Responder' in the region.

Indian Navy and Coast Guard have promptly responded to several crises in Sri Lanka such as containing the fire onboard MT New Diamond and MV XPress Pearl.

India also sent 100 T Liquid Medical Oxygen during the fourth wave of Covid pandemic via INS Shakti.

Supplies of vaccines and medicines from India to Sri Lanka have been key element of ties amid the Covid crisis.

New Delhi has provided 1 million doses of Covishield vaccine to Sri Lanka with 50% of it being gifted by India.


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Dec 3, 2017

China in Nepal: Another proxy war with India?​

“If China succeeds in replacing India as the key economic as well as security partner for Nepal… it would have breached the Himalayan borders that separate the Indian mainland from China.” Shashank Shukla

Historical Perspective
Nepal’s relationship with China’s first recorded official engagement dates back to the middle of the seventh century, when Nepal’s armed forays into Tibet led to Chinese intervention favouring the latter. It resulted in the signing of the Sino-Nepalese Treaty of 1792, which provided a tribute-bearing mission from Nepal to China every five years as a symbol of China’s political and economic supremacy in the region.

Tibet was the focal point in their off-and-on relations for many years till 1814-16, when British India entered as another important contender for Nepali loyalties. During the first Anglo-Nepalese war of 1814, China refused to come to Nepal’s aid and voluntarily ceded its dominant position in Nepal to the growing British influence in the region.

The Chinese used to address the King of Nepal with the title of “Wang”. China seemed to use that title for the Nepalese monarch since they considered him a vassal of the Chinese Empire. The first treaty between Nepal and Tibet dates to 1789, when Tibet, defeated by Nepal, had pledged to pay an annual tribute to Nepal. In 1791, Nepal invaded Tibet again, but this resulted in a victory of the Ch’ing over Nepal in 1792, forcing Nepal to pay a continual quinquennial tribute to China. The treaty forced the Nepalese to send diplomatic missions with gifts to the Manchu Emperor every five years. This tribute was regarded differently by the Prime Minister of Nepal, Chandra Shum Shere (1863–1929), while clarifying this issue in his letters to the British Resident in Nepal, John Manners Smith. He stated that this ‘tribute’ was a simple exchange of gifts between two independent countries. “We have always regarded our relations with China as long standing, simple, friendly, and innocent in nature. The missions from this country to China were embassies from one court to another, which were invariably treated with honour and consideration due to honoured foreign guests”.

China’s Primary Interest in Nepal
China’s main interest in Nepal has always been led by its concerns over Tibet, which China has ruled since 1950. Beijing’s involvement with Nepal grew much more intense post the March 2008 ethnic Tibetan uprising against Chinese rule, which deeply embarrassed the Chinese Government on the eve of its 2008 Olympic Games. An estimated 25,000 Tibetans live in Nepal, but with China pushing Nepal to tighten its border with Tibet, the number of new refugees reaching Nepal has dropped to a trickle from an earlier annual figure of around 2,500. China also has increased its focus on economic ties, trade between China and Nepal has quadrupled since 2003.

Nepal, on the other hand, has always looked at either China or India, whichever it considers crucial for its survival at that moment, given its delicate land-locked position between the two Asian superpowers. Maintaining a balancing relationship with China remains Nepal’s key and critical component of its ‘China’ foreign policy.

When India gained its independence in 1947, the vacuum created in the power equation after Britain left sought to be filled by India in trying to emerge as the foremost power of South Asia. This resulted in the initiation of two binding treaties with Nepal, firstly the Indo-Nepal Treaty of Peace and Friendship of 1950, and secondly, the Trade and Transit Treaty. These treaties provided the basis for initiating bilateral relations between a newly independent India and Nepal and resulted in the articulation of the identification of too many cultural and historical similarities between the two nations, which though well-intended, created suspicion in the minds of the Nepalese politicians about India’s long-term intentions. They also felt that these treaties reminded them of their perception of their inferior status vis-à-vis India.

Subsequently, a series of events which included the Indo-Soviet Treaty of Peace, Friendship and Cooperation in 1971, the Indo-Pak War and the creation of Bangladesh, the merger of Sikkim in India in 1974 and later, India’s unofficial support to the political opposition in Nepal and finally the start of the Naxalite movement along the Indo-Nepal border,” in the areas of Siliguri and Naxalbari in West Bengal created apprehension in the mind of the King of Nepal and his coterie of advisors, who felt that the spillover of this Naxalite movement might result in a more significant problem within Nepal, given the wide disparity in the living standards amongst the people of Nepal. Later, India’s nuclear explosion in 1974 and her decision to emerge as a declared nuclear power added to Nepal’s discomfiture and fuelled her insecurity about the impact of India’s growing stature as a regional power and her intent toward Nepal.

It was in this context that Nepal restarted and reshaped its ties with China as a possible counterweight to India. Certain international events too influenced this decision to go back to China; most important was the defeat of India in the Indo- China border war in 1962 and the beginning of aggressive Chinese posturing concerning the continual disputed border claims with India. This event caused an alarm within the Nepali power and political structures, who felt that China would do the same to them sooner rather than later if not influenced now. Further, this insecurity of Nepal also propelled China to start thinking of consolidating her presence within Nepal. It felt that it would be reasonably easy to prop up the Nepali power structure against India if and when the need arose, given Nepal’s insecurity and apprehensions.

Nepal’s relationship with China is need-based and practical. It lacks the warmth and depth of the India-Nepal relations, no matter how flawed it probably is. It is evident from the past that China and Nepal are prone to distancing whenever the circumstances change, and the power situation demands. On the other hand, India and Nepal share a deep and enduring relationship cemented by shared history and culture.