Conflict and Peace in South Asia 9781849505345, 9780444531766

Citation preview

CONFLICT AND PEACE IN SOUTH ASIA

Contributions to

Conflict Management, Peace Economics and Development volume 5 SERIES EDITOR

MANAS CHATTERJI Eurasia: A New Peace Agenda, edited by M. D. Intriligator, A. J. Nikitin and M. Tehranian Cultural Differences between the Military and Parent Society in Democratic Countries, edited by G. Caforio Managing Conflict in Economic Convergence of Regions in Greater Europe, by F. Carluer Military Missions and Their Implications Reconsidered: The Aftermath of September 11th, edited by G. Caforio and G. Kuemmel Conflict and Peace in South Asia, edited by M. Chatterji and B. M. Jain War, Peace, and Security, edited by Jacques Fontanel and Manas Chatterji Armed Forces and Conflict Resolution, edited by G. Caforio, G. Kuemmel and B. Purkayastha (Forthcoming) European Defense Policy, by M. Foucault (Forthcoming) Crisis Management and Regional Cooperation, by I. J. Azis (Forthcoming) Peace Science: Theory, Methods and Cases, by P. Gangopadhyay and M. Chatterji (Forthcoming) Arms Embargo Implementation- Comparing Experiences for Improving Effectiveness, by Michael Brzoska and George Lopez (Forthcoming) Regional Development and Conflict Management: A Case for Brazil, by Raphael Bar-El (Forthcoming)

Contributions to Conflict Management, Peace Economics and Development volume 5

CONFLICT AND PEACE IN SOUTH ASIA EDITED BY

MANAS CHATTERJI School of Management, Binghamton University, New York

B. M. JAIN University of Rajasthan, India

United Kingdom – North America – Japan India – Malaysia – China

Emerald Group Publishing Limited Howard House, Wagon Lane, Bingley BD16 1WA, UK First edition 2008 Copyright © 2008 Emerald Group Publishing Limited Reprints and permission service Contact: [email protected] No part of this book may be reproduced, stored in a retrieval system, transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without either the prior written permission of the publisher or a licence permitting restricted copying issued in the UK by The Copyright Licensing Agency and in the USA by The Copyright Clearance Center. No responsibility is accepted for the accuracy of information contained in the text, illustrations or advertisements. The opinions expressed in these chapters are not necessarily those of the Editor or the publisher. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library ISBN: 978-0-4445-3176-6 ISSN: 1572-8323 (Series)

Awarded in recognition of Emerald’s production department’s adherence to quality systems and processes when preparing scholarly journals for print

To all people who work for peace

This page intentionally left blank

CONTENTS LIST OF FIGURE AND TABLES LIST OF CONTRIBUTORS

xi xiii

FOREWORD

xv

INTRODUCTION: HISTORICAL AND CONTEMPORARY PERSPECTIVES ON SOUTH ASIA Manas Chatterji and B. M. Jain

1

PART I: INDIA AND PAKISTAN A MODEL OF MILITARY SPENDING OF INDIA AND PAKISTAN Manas Chatterji

19

A GAME THEORETICAL APPROACH TO THE COALITION POLITICS IN AN INDIAN STATE Manas Chatterji

31

EVIDENCE OF ASYMMETRIC COINTEGRATION BETWEEN THE MILITARY EXPENDITURES OF INDIA AND PAKISTAN Nadir O¨cal and Julide Yildirim

47

LIBERALISATION, DEMOCRATISATION AND THE DISTRIBUTION OF URBAN LOCAL PUBLIC GOODS Partha Gangopadhyay

57

vii

viii

CONTENTS

NATURAL DISASTERS: A NONMILITARY THREAT TO NATIONAL SECURITY Ajey Lele

73

NUCLEAR PROLIFERATION IN SOUTH ASIA: A PSYCHO-CULTURAL ANALYSIS B. M. Jain

87

PART II: OTHER SOUTH ASIAN COUNTRIES MANAGING DEVELOPMENT FOR PEACE: SRI LANKA Penelope Hood

105

ETHNIC CONFLICT IN SRI LANKA: THE DILEMMA OF BUILDING A UNITARY STATE A. R. M. Imtiyaz

125

THE PEACE PROCESS IN SRI LANKA Alan Bullion

149

ECONOMIC IMPERATIVE FOR PEACE IN SRI LANKA Muttukrishna Sarvananthan

171

INDIA ENGAGES AFGHANISTAN: EXPANDING ITS INFLUENCE IN THE NEIGHBORHOOD Harsh V. Pant

185

DYNAMICS OF POLITICAL TRANSITION IN MYANMAR: IMPEDIMENTS AND ALTERNATIVE FUTURES B. M. Jain

203

Contents

ix

DEALING WITH MAOISTS: NEPAL’S EXPERIENCE WITH PEACE NEGOTIATIONS Bhuwan Chandra Upreti

213

INDIA AND BANGLADESH: A RELATIONSHIP ADRIFT Harsh V. Pant

231

POLITICAL DIMENSIONS OF ISLAMIC FUNDAMENTALISM IN SOUTH ASIA Kalim Bahadur

249

PART III: DEVELOPMENT, TRADE AND CONFLICT SOUTH ASIAN REGIONAL COUNCIL (SARC) AND SOUTH ASIAN RIVERS: A STUDY IN WATER CONFLICT Ashok Swain

269

INDIA’S TRADE WITH ITS SOUTH ASIAN NEIGHBOURS: CONFLICT OR CONFIDENCE BUILDING? Indra Nath Mukherji

285

TRADE LIBERALIZATION AND NATIONAL SECURITY IN THE CONTEXT OF WTO FRAMEWORK Bisweswar Bhattacharyya

299

BUSINESS PROCESS OUTSOURCING UNDER GLOBALISATION: IS THE CONFLICT BETWEEN INDIA AND THE USA RECEDING? Dilip Dutta

315

x

CONTENTS

RETROSPECT AND PROSPECT Manas Chatterji and B. M. Jain

337

INDEX

349

LIST OF FIGURE AND TABLES Figure 10.1

Ceasefire Complaints.. . . . . . . . . . . . . . . . . . . . . . . .

Table 3.1

Party Position after 1967 Election in West Bengal Assembly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relative Strengths of ULF and PULF. . . . . . . . . . . Result of Mid-term Election . . . . . . . . . . . . . . . . . . Payoff Table for Four-person Zero Sum Game . . . . Threshold Cointegration Test Results . . . . . . . . . . . Secondary Data Sources for Urban LPGs in India . . Classification of Voters/Citizens on the Basis of Monthly per Capita Income . . . . . . . . . . . . . . . . . . Minimum Per Capita Expenditure Norm (oi) for LPGs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Survey Results on Preferences of Citizens/Voters for LPGs in 1986–1987 . . . . . . . . . . . . . . . . . . . . . . . . Per Capita Expenditure on the Local Public Goods in 1976–1977 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Regression Result . . . . . . . . . . . . . . . . . . . . . . Sri Lanka: Percentage Distribution Ethnicity 2001 . . Conflict-time and Pre-conflict Economic Growth 1961–2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Defence/Social Expenditures as a Proportion of Total Public Expenditure (%) 1991–2004 . . . . . . . . . . . . . Defence Expenditures as a percentage of the GDP 1991–2003 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Military Development in South Asia . . . . . . . . . . . . Defence Budget 1991–2004 (LKR Million). . . . . . . .

Table Table Table Table Table Table

3.2 3.3 3.4 4.1 5.1 5.2

Table 5.3 Table 5.4 Table 5.5 Table 5.6 Table 8.1 Table 11.1 Table 11.2 Table 11.3 Table 11.4 Table 11.5

xi

. . . . . .

158

. . . . . .

35 36 38 41 52 65

..

66

..

66

..

67

. . 68 . . 69 . 107 .

173

.

176

. . .

177 179 180

This page intentionally left blank

LIST OF CONTRIBUTORS Kalim Bahadur

Jawaharlal Nehru University, New Delhi, India; and 6 SRM APTS, 106, I.P. Extension, Patparganj, New Delhi

Bisweswar Bhattacharyya

Institute for Integrated Learning in Management (IILM) Institute for Higher Education, Lodhi Road, New Delhi, India

Alan Bullion

The Open University, Tunbridge Wells, Kent, London

Manas Chatterji

School of Management, Binghamton University, New York, USA; George Mason University and Poznan University of Economics, Poznan, Poland; Peking University, Beijing, China

Dilip Dutta

Discipline of Economics, Faculty of Economics & Business, The University of Sydney, New South Wales, Australia

Partha Gangopadhyay

School of Economics and Finance, University of Western Sydney, New South Wales, Australia

Penelope Hood

Ashcroft International Business School, Anglia Ruskin University, UK

A. R. M. Imtiyaz

Temple University, Political Science, Philadelphia, PA, USA

B. M. Jain

University of Rajasthan, India; International Noble Academy, Toronto, Canada; The UNESCO Chair of Philosophy in Peace, Jaume I University at Castellon, Spain; and 4/87, Near Power House, Jawahar Nagar, Jaipur, Rajasthan, India xiii

xiv

LIST OF CONTRIBUTORS

Ajey Lele

Institute for Defense Studies and Analyses (IDSA), No. 1 Development Enclave, Delhi Cant, New Delhi, India

Indra Nath Mukherji

Jawaharlal Nehru University, School of International Studies, Delhi, India

Nadir O¨cal

Department of Economics, Middle East Technical University, Cankaya/Ankara, Turkey

Harsh V. Pant

Department of Defence Studies, King’s College London, Strand, London

Muttukrishna Sarvananthan

Point Pedro Institute of Development, Point Pedro, Sri Lanka; Fullbright Visiting Research Scholar, George Washington University, Washington, DC

Ashok Swain

University of Uppsala, Uppsala, Sweden

Bhuwan Chandra Upreti

South Asia Studies Centre, University of Rajasthan, Jaipur, India

Julide Yildirim

Department of Econometrics, Gazi University, Besevler/Ankara, Turkey

FOREWORD One of the persistent trouble spots in the world is South Asia, which comprises India, Pakistan, Bangladesh, Nepal, Bhutan, Sri Lanka and Maldives. The conflict started simmering between India and Pakistan with the partition of the British India, resulting in a secular India and an Islamic Pakistan. They fought four wars including Kargil. It is generally believed that Kashmir is the core issue of conflict between India and Pakistan. The latter occupied one-third part of Kashmir through its covert military invasion of Kashmir in 1947–1948. The conflict is further intensified by international politics and nuclear confrontation. Each country has serious internal problems. In Pakistan, recently it took a disastrous form with the murder of Benazir Bhutto. It is a mystery how India is surviving as a secure largest democracy in the world in spite of economic, social and political problems confronting it. Besides mutual animosity, each country faces formidable challenges of economic development. The situation in other countries in the region is no different. The ensuing political struggle involving Maoists, pro-democracy political activists, and the monarch paved the way for abolition of centuries-old monarchy through the constitutional amendment bill passed by the interim parliament of Nepal in December 2007. Bangladesh is in serious political chaos oscillating between temporary democracy and dictatorship. In Mayanar, the military dictatorship persists. The civil war between Sinhalese and Tamils in Sri Lanka is still persisting for the last more than two decades. The South Asian scene is further complicated by the forces of globalization and natural disasters. Distinguished scholars discuss manifold challenges, issues and problems facing the region in this volume from diverse perspectives while spelling out futuristic scenarios. Manas Chatterji August, 2008 General Editor

xv

This page intentionally left blank

INTRODUCTION: HISTORICAL AND CONTEMPORARY PERSPECTIVES ON SOUTH ASIA Manas Chatterji and B. M. Jain Conflict and peace concepts are as old as human civilisation. They are inextricably linked to each other. They will always remain a dominant analytical category to understand the dynamics of human behaviour as well as state and societal responses and reactions so long as human civilisation exists in this highly anarchical international order. During the Cold War era, international relations theorists as well as practitioners have had a good opportunity to explain every violent conflict or war within the geopolitical and ideological framework, while the central concern of peace theorists in the 1970s and 1980s was how to devise ways and means to bring about a non-violent international order. For this, they embarked on an endless intellectual inquiry into the root causes of conflict as well as the imperatives of peace. They endeavoured to flush out the underlining layers of human urges for peace and security. But the rise of ‘hegemonic aspirations’ (Ikenberry, 2006) by the superpowers in the Cold War and by the ‘hyper-superpower’ in the post-Cold War period, i.e. the United States, made it possible for this global hegemon to enlist the support of ruling elites from the weak and middle ranking countries in consolidating American hegemonic power. The debate is now veering round the linkage between benign hegemonism and peaceful international order.

Conflict and Peace in South Asia Contributions to Conflict Management, Peace Economics and Development, Volume 5, 1–16 Copyright r 2008 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1572-8323/doi:10.1016/S1572-8323(08)05001-7

1

2

MANAS CHATTERJI AND B. M. JAIN

International theorists of power and hegemony – for instance, John Hall, Robert Jervis, Peter Katzenstein, Robert Keohane, Michael Doyle, Joseph Nye and Jack Snyder – through their comprehensive writings have come out with various explanations behind power and conflict, hegemony and conflict. While Jon Galtung, known as the father of peace research, is engaged in discovering paths to peace by undertaking an holistic approach in order to identify root causes that lead to multiple conflicts – social, political, economic, cultural, psychological ones. Changing environmental contours as well as dynamics must be taken into account before we attempt to find out or discover novel methods and strategies to promote peace and help manage and/or resolve conflict. Therefore, it is vitally important to analyse the causes of violence, conflict and war and to identify those essential conditions that might help foster a just and peaceful world order. The central question is how to promote a culture of peace among multicultural, multilinguistic and multireligious communities at national, regional and global levels. As regards challenges to peace in South Asia, they stem from diverse sources ranging from poverty through nuclear proliferation and heavy military expenditure at the cost of development and social good to militancy, insurgency, illegal migration in the region, environmental degradation, drug trafficking, child labour, gender discrimination and so on. Do regional challenges demand regional solutions? How do ruling elites in South Asia address the challenges? How can securitisation help resolve political issues by not politicising fundamental problems like illegal migration or displacement of people to promote multinational investors? While the securitisation of an issue refers to the resolution of an issue ‘outside the established rules’, i.e. ‘taking an issue beyond normal politics’, according to the Copenhagen School the act of securitisation is conceived as a ‘speech act’ through which insecurity is identified, threats are spelt out and the ‘object of security is constructed’. Some scholars have defined securitisation as a process that takes ‘politics beyond the normal rules of game’. Impliedly, when an issue is securitised, it is conceived as a ‘matter of emergency’ to cope with the ‘exigencies of the situation’. By logical extension, existential threats legitimise ‘breach of rules’. The Copenhagen School of theorists have further expatiated upon the nature, pattern and processes of securitisation and de-securitisation (Waever, 1995a) in the context of social practise that necessitates ‘extreme measures’ to deal with existential threats. Obviously, there are paradoxical goals between legal obligations of State and humanitarian concerns

3

Introduction

warranting extra-legal measures to cope with an extraordinary situation. Similarly, the battle between the extension of legal equality to securitise migrants on the one hand and an outcry of extremist political groups against their securitisation for fear of losing their national identity on the other impinges upon simultaneous processes of integration and fragmentation of state-nation (Waever, 1995b).

GEOPOLITICAL SCENARIO The geopolitical scenario in South Asia has of course assumed a new dimension at least in three fields: ethno-cultural, strategic configuration and psychological. In the ethno-cultural field, South Asia has become highly volatile and explosive. In most of the states of South Asia, ethno-cultural conflicts exist: for instance, in Sri Lanka where the LTTE militant group is engaged in a bloody warfare vis-a`-vis the Sri Lankan State; in Pakistan ShiaSunni conflicts and the Mohajir Qaumi movement for autonomy; and in India the religious fundamentalism due to the rise of Hindutva that has created a panic among minority groups like Christianity. In Nepal, the Communist Party (ML) is indulged in the worst kind of political violence. These trends show the upper hand of ethno-cultural elements in the geopolitical setting of South Asia. From the psychological point of view, South Asia presents a mixed scenario. India on the one hand feels itself mauled by Pakistan on the question of a low intensity conflict being fuelled by the Inter Services Intelligence (ISI) of Pakistan whose networking in almost every part of India is expanding. Their activities have increased after Pakistan carried out nuclear weapon tests in May 1998. Secondly, Indian foreign policy makers maintain that on the Kargil conflict Pakistan’s evil designs have been exposed to the international community including Pakistan’s alleged hand in the hijacking of the Indian plane in Kathmandu. America now seems to be fully convinced that Pakistan is encouraging militant activities in the region detrimental to peace and stability of the region. South Asia has come into a sharp focus ever since India and Pakistan carried out multiple nuclear weapon tests in May 1998. The entire international community is seriously worried over the disastrous consequences of nuclear South Asia. And it is equally concerned with preventing not only the impending nuclear threat to the regional peace and stability but also its long-range fallout on other volatile regions such as the Middle East and Northeast Asia. Such an assumption is based mainly on

4

MANAS CHATTERJI AND B. M. JAIN

the fact that India and Pakistan have a long history of armed conflicts and perpetual hostility over the Kashmir dispute – a core issue that has rocked their relationship to the lowest ebb. In a quest for outmanoeuvering each other regionally and internationally, there is an increasing possibility of intensive nuclear arms and missile upgradation competition. The situation is further complicated by the fact that both countries have neither entered into a bilateral no-first-use agreement nor developed reliable command, control and mutually verifiable systems to avert any possibility of nuclear risk emanating from accident, miscalculation or irrational nuclear decision. It is also feared that the transfer of nuclear technology from South Asia to other sensitive regions’ ‘rogue states’ might result in an untold nuclear catastrophe threatening international peace and security, and further undermining the global efforts towards nuclear non-proliferation and disarmament.

ETHNO-RELIGIOUS CONFLICTS Ethno-religious conflicts are a world wide phenomenon posing a real threat to civil societies, to the growth of democratic institutions, consolidation of democratic governance and safeguarding of human rights. South Asia is not an exception. On the contrary, it has turned out to be a flash point of ethnoreligious conflicts that has not only encouraged militancy, insurgencies and demand for jihad (holy war) but has also hindered the process of democratisation of societies and obstructed the restoration of democracy, for instance, in a country like Pakistan now reeling under the military regime after the overthrow of a democratically elected government there. The role of State as an agency of a balancer as well as an impartial referee has been potentially curtailed by a dominant ethnic group, for the levers of powers are in the hands of the dominant group. In the case of India, ethnopolitical conflicts are first produced, manipulated, engineered and fuelled by the political class, and later these conflicts are managed by the same class either through political reconciliation or citizenry intervention. This is in contrast to Pakistan. Two main explanations may be offered for this conspicuous contrast. First, Indian polity is secular in contrast to Pakistan as an Islamic state. Second, the military in India is subordinate to civilian authority, diametrically opposed to Pakistan. Third, in India’s democratic governance a medley of minority groups express their ire against the injustices of a dominant religious group by staging protests and dharnas, which are supported by local and regional parties for deriving political mileage out of them. Whereas, miniscule religious groups like Christians,

5

Introduction

Hindus and Ahmadia Muslims are virtually at the receiving end. In this situation, communal strife assumes a dangerous proportion. Political voices for self-determination are heard. It becomes a stupendous task for the state regime in a country like India to satisfy all the disgruntled minority groups incited into violent action against state apparatus by narrowly structured politicians. For instance, Kashmiri Muslim separatists groups inspired by Pakistan are demanding self-determination. The Indian government has refused to accept their demand; whereas, it has been emphasising a greater autonomy for the Kashmiri people within the constitutional framework. As a consequence, communal violence between Hindus and Muslims of Jammu and Kashmir, between Kashmiri separatists and law and order enforcing agencies, including military and paramilitary forces in the state, continue unabated. Also, continual ethnic feuds in Pakistan between Sunnis and Shiite, between Muslims and Christians and between Muslims and Hindus more often than not lead to looting, arson, rape and murder.

PROFILE OF SOUTH ASIA South Asia is a distinct geographical entity comprising seven countries – India, Pakistan, Bangladesh, Nepal, Bhutan, Sri Lanka and the Maldives (situated in the Indian Ocean). Even though cut off from the Asiatic continent due to the highest Himalayan Mountains in the world, South Asia is a gateway between South East and Middle East Asia. It is bounded on the south by the Indian Ocean. To its northern part are Russia and China and to its western side lie Afghanistan and Iran. India is placed in a unique position. It is the only country in South Asia that shares its borders with the rest of the South Asian countries; whereas, none of them share common borders with each other. As regards India, its northern part of the Himalayas is bordering on Pakistan, Nepal and Bhutan, and the eastern part touching upon Bangladesh and the southern side reaching out to Sri Lanka. This apart, India occupies a pre-eminent position in South Asia, unlike any other country in the Southeast Asian region, in terms of the size of its population, natural resources, economy and industrial, military and technological power. Nevertheless, Pakistan has a greater strategic value in comparison to India primarily because of its geographical proximity to the Gulf and Central Asian regions endowed with abundant energy and strategic resources.

6

MANAS CHATTERJI AND B. M. JAIN

SOUTH ASIA AND THE UNITED STATES If seen in historical perspective, South Asia’s relations with the United States were mainly determined and guided by the geopolitics of the Cold War spearheaded by two superpowers – the United States and the Soviet Union. Coincidentally, India and Pakistan at that point in time had emerged as two independant and sovereign nations with the partition of British India in August 1947. Given the mutual hatred and hostility rooted into the preand post-partition legacy leaving behind scars of communal carnage, India and Pakistan fought the first war over Kashmir in 1947–1948. Both the countries pursued the diametrically opposed foreign policies suited to their respective national interests. On one hand, India chose to remain non-aligned by keeping itself aloof from the military alliance systems of the superpowers. On the other hand, Pakistan readily agreed to join the US-sponsored South East Asia Treaty Organization (SEATO) in 1954, with an aim and intention to bolster its defenses vis-a`-vis India. India’s first Prime Minister, Jawaharlal Nehru (1889–1964) rejected the idea of joining military blocs of either of the superpower, which in his perception was tantamount to ‘loss of freedom’ and autonomy while conducting the country’s relations with the outside world. On the contrary, in pursuit of its policy of global containment of communism America recruited military allies from Asia in SEATO and Central Treaty Organization (CEATO). By virtue of being a member of SEATO and CENTO, Pakistan qualified not only for US military and economic assistance but also for the US diplomatic support on the Kashmir issue at the United Nations, as is evident from using its veto power in favour of Pakistan on numerous occasions. Indian policy makers regarded the US policy of military assistance to Islamabad as an ‘unfriendly act’ against their country by arguing that it might not only accentuate hostility between New Delhi and Islamabad but also turn the South Asian region into a superpower rivalry for carving out respective ‘spheres of influence’. In order to allay Indian fears, the United States had given moral assurances to India time and again that military armaments supplied to Pakistan would not be used against it. Indian apprehensions, however, proved correct when American weapons were used by Pakistan against India in the 1965 Indo-Pakistan War. Despite Indo-US differences on the arms policy, America continued food aid to India under the PL-480. US–South Asia equations came under a dark shadow with the 1971 IndoPakistan War, resulting in the emergence of Bangladesh as an independent and sovereign country. America stopped military and economic assistance to both countries. This had a crippling effect on Pakistan’s defence and

Introduction

7

security since it was dependant on US military hardware. Consequently, US–Pakistan relations got strained. Another severe blow dealt to the US non-proliferation policy was India’s nuclear explosion in May 1974. The US government stopped the supply of nuclear fuel to India’s Tarapur atomic power plant. Pakistan also tried to chase India by indulging in a nuclear weapon programme through clandestine routes. America was unable to take any punitive action against Pakistan’s suspected nuclear programme due to the Soviet military invasion of Afghanistan in December 1979. It imposed sanctions on Pakistan in 1990 after the withdrawal of Soviet troops from Afghanistan in 1989. This gave a setback to US–Pak relations. Following prolonged persuasion by Pakistan, the US administration exercised a onetime waiver by having amended the Pressler Amendment (1985) to facilitate the supply of military hardware worth over 300 million dollars to Pakistan. This gave partial relief to Pakistan and brought the Washington– Islamabad relations on an even keel. US–South Asian relations reached a low point in May 1998 when India and Pakistan carried out nuclear weapons tests. This was an open defiance of US non-proliferation objectives. Although the US administration imposed sanctions on India and Pakistan, they proved counter-productive. Both countries refused to roll back their nuclear programme. But the tragic events of 9/11 forced the Bush administration to lift sanctions against New Delhi and Islamabad, who declared their unconditional commitment and support to the US-led war on terrorism. The US policy tailored to cultivating strategic ties with the subcontinent without being prejudiced to any party did produce a conducive environment in the region. But at the same time India expressed its unhappiness over the US conferring of Non-NATO Military Ally (NNMA) status to Pakistan. Despite that, Indo–US relations are on upswing. They are expanding and deepening cooperation in political, economic and strategic fields at global, regional and bilateral levels. Pakistan has also realised that the prolonged hostility with India proved costly to its development and welfare programme. It is now keen to keep a composite dialogue with India on outstanding bilateral disputes, including Kashmir and the cross-border terrorism with the US as a facilitator.

SOUTH ASIAN PERSPECTIVES ON THE UNITED STATES DURING THE COLD WAR: MAJOR ISSUES Being a complex region characterised by internal contradictions and intraregional disputes, South Asia’s perspective on the United States can hardly

8

MANAS CHATTERJI AND B. M. JAIN

be described as identical or convergent both during and after the Cold War period. In reality, India and Pakistan are ‘protagonists’ of the region whose perspectives on and perceptions about the US matter. The other small countries of South Asia are gripped by fear psychosis due to perpetual hostility between New Delhi and Islamabad, whose perceptions about America are at variance. For instance, Pakistan looks upon American involvement in the security affairs of the region as vitally important for the regional balance, peace and security and stability in order to balance off India. This was the case especially during the Cold War period; whereas, India has always opposed the US policy of intervention in domestic and external affairs of South Asian countries, which in Indian perception might sharpen differences among them. In order to understand the dynamics of South Asian perspectives on America, one will need to take up some problematic issues during the Cold War period.

CHINESE AGGRESSION China’s unprovoked aggression against India in October 1962 was not only a shattering blow to India’s non-aligned policy but also a litmus test for US commitment to containing communism. President John F. Kennedy (1917– 1963) spontaneously responded to Prime Minister Nehru’s appeal for military assistance to deter China’s threat to a democratic India. American weapons, including C-13 Hercules transport planes, were immediately supplied to India. Besides, 200 American air crew members also came to assist the Indian army in lifting troops and supplies. To the United States, it was a great opportunity not only to defeat China’s expansionist designs in the region but also to come closer to India. Being a US military ally, Pakistan was not happy over America bailing out India. In Pakistani perception, the Kennedy administration betrayed them by not only siding with India but also belying their hopes for the administration’s failure to help settle the Kashmir problem to their satisfaction. One might recall that President Kennedy had dispatched a team headed by Averell Harriman to India to take stock of India’s defence requirements. The Harriman team arrived in New Delhi in November 1962 and met with Prime Minister Nehru to discuss the post-war situation. During the face-to-face meeting with Nehru, Harriman and Sandys raised the Kashmir issue following Pakistan’s mounting pressure on President Kennedy to help resolve the Kashmir problem. Nehru maintained that it was an ill-opportune time to discuss the

9

Introduction

Kashmir issue when India had been facing the Chinese threat. Nevertheless, it was with the US government’s pressure that ministerial talks between India and Pakistan were held on 27 December 1962, and were again resumed in New Delhi on 16 January 1963, between Z. A. Bhutto, the leader of the Pakistani delegate and his Indian counterpart Sardar Sawaran Singh. The talks failed since India had refused to accept any third party mediation. The Kennedy administration felt disappointed over Indian obstinacy. Despite that India was provided with western aid of 120 million dollars equally shared by America and Britain to thwart any recurring Chinese threat to Indian security, this gesture not only had produced goodwill among Indians for the United States but also had brought Indo–US friendship closer politically. On the contrary, Pakistan considered US military aid to a non-aligned India as an ‘unfriendly act’.

THE 1965 INDO–PAKISTAN WAR The US–South policy was faced with another challenge when the Indo– Pakistan War took place in September 1965. America was faced with a dilemma. On the one hand, Indians criticised America, for its weapons were used by Pakistan against India in the 1965 War. On the other hand, US arms embargo had a crippling impact on Pakistan since it was virtually dependant upon American military hardware, including spare parts and ammunition. Pakistani rulers and their people felt betrayed by America; instead of coming to their country’s rescue in the time of crisis, it not only remained neutral but also squeezed Pakistan by stopping the supply of weapons. Pakistan started reappraising its policy and came much closer to China.

THE BANGLADESH CRISIS South Asia witnessed a profound turmoil with the onset of civil war in East Pakistan (now known as Bangladesh) following the refusal of Pakistani military leaders to hand over power to Sheikh Mujibur Rahman (1921– 1975) whose Awami League Party had won an absolute majority in the parliamentary elections held in December 1970. Mujib was arrested and jailed by Pakistani military authorities and unleashed an unprecedented repression against Bangladeshi Muslims. As a result, millions of Bangladeshi refugees fled to India. Indian Prime Minister Indira Gandhi (1917–1984) visited America and met with President Nixon (1913–1994) to

10

MANAS CHATTERJI AND B. M. JAIN

discuss the situation in East Pakistan and its economic and security fallout on India. Talks between them, however, ended in a fiasco. On the other hand, Nixon and Kissinger failed in persuading Yahya Khan to reach some credible political settlement to defuse the internal turmoil. Pakistan declared the war against India in December 1971. President Nixon asked Kissinger to be tough on India and not ‘squeeze Yahya’. Nixon and Kissinger’s famous tilt in favour of Pakistan spoiled America’s relations with India that had reached its lowest ebb. Dispatch of the US Enterprise task force into the Bay of Bengal further infuriated India, which described this act as US bullying tactics. But India’s signing of the Treaty of Peace, Friendship and Cooperation with the Soviet Union in August 1971 acted as a psychological deterrence against any eventuality of a direct military involvement of Washington and Beijing on behalf of Pakistan. On 16 December 1971, Pakistani soldiers surrendered before Indian forces, following which Bangladesh became an independent and sovereign nation. Be that as it may, Pakistan felt disenchanted with America for not doing enough to prevent its dismemberment except that of demonstrating its symbolic friendship by dispatching the aircraft carrier in the Bay of Bengal. In July 1972, Mrs. Gandhi and Z. A. Bhutto (1928–1979) signed a historic Simla Agreement committing themselves to resolve all outstanding disputes including Kashmir through bilateral peaceful negotiations. After the Simla Agreement, President Nixon pursued the policy of rapprochement with India. America not only had welcomed the Simla accord but also had recognised the geopolitical reality of India being a pre-eminent power in the region. After President Nixon’s resignation following the Watergate scandal, VicePresident Gerald Ford became President in accordance with constitutional provisions. He was sympathetic to New Delhi and was eager to improve the US ruptured ties with India due to the Nixon administration’s heavy tilt in favour of Pakistan during the 1971 Indo–Pakistan War. His Secretary of State Kissinger visited India in October 1974. In his remarks, Kissinger not only acknowledged India’s non-aligned policy for the first time but also recognised India as a ‘pre-eminent power’ in South Asia. His visit had a positive impact on India–US relations. But Pakistan did not take kindly to the blossoming relations between Washington and New Delhi.

INDIA’S FIRST NUCLEAR EXPLOSION Another issue that remained a high priority of US policy makers was to promote non-proliferation goals in South Asia following India’s first

11

Introduction

nuclear detonation carried out in May 1974. America was caught up in a dilemma to conduct its relations with India and Pakistan since the latter was also engaged in a clandestine nuclear programme. The 1976 Symington Amendment Act had also created problems in the Washington–Islamabad relationship when America had invoked this amendment by cutting off foreign military assistance to Pakistan for importing nuclear enrichment technology. Further, the enactment of the Nuclear Non-Proliferation Act (NNPA) in March 1978 also caused serious strains in US relations with India because the Act prohibited the supply of US nuclear fuel to India’s Tarapur Atomic power station as guaranteed under the August 1963 nuclear agreement between India and the United States. With Prime Minister Morarji Desai giving moral assurance that India would never build nuclear weapons in the future, the supply of nuclear fuel was resumed for 3 years under a grace period. India carried out its first nuclear explosion on 18 May 1974, at Pokhran in the western part of Rajasthan. President Jimmy Carter although favourably disposed to India, had to take an unpalatable decision to stop the uranium supply for India’s Tarapur Atomic power station by invoking its Nuclear Non-Proliferation Act, 1978. India criticised this unilateral act on the part of the United States that it had violated its commitment under the nuclear cooperation agreement of August 1963. However, the Carter administration resumed the supply of nuclear fuel under a 3-year grace period on the moral assurance of Indian Prime Minister Morarji Desai (1886–1995), a wellknown Gandhian and strict disciplinarian that India would not carry out nuclear tests in the future.

SOVIET MILITARY AGGRESSION ON AFGHANISTAN The US policy in South Asia took a U-turn following the Soviet Union’s military invasion over Afghanistan in December 1979. Pakistan became a front line state in the US strategic framework. President Carter (1924–) offered military and economic aid worth 400 million dollars to Pakistan, which President Zia ul-Huq described as ‘peanuts’. After President Carter’s defeat in the November 1980 presidential elections, the newly elected President Ronald Reagan (1911–2004) offered Pakistan a 6-year package of 3.2 dollars of military and economic aid despite India’s protestation that this would trigger an arms race in the region.

12

MANAS CHATTERJI AND B. M. JAIN

The Reagan Administration, however, did not heed Indian protests since Pakistan was assigned the status of a frontline state in the US strategic policy in the region. The US non-proliferation goals in South Asia were glossed over. The US administrations waived the application of its various anti-proliferation legislative Acts such as the Symington (1976), Glenn (1977) and the Pressler Amendment (1985) against Pakistan so long as Soviet forces were stationed in Afghanistan until 1989. President Bush slapped the Pressler Amendment on Pakistan in 1990 while arguing that the administration had conclusive evidence that Pakistan was clandestinely involved in the nuclear weapon-building programme. Indians were happy over this decision; whereas, Pakistani rulers and the people described the step as anti-Pakistan. They described America as an unreliable friend.

SOUTH ASIAN PERSPECTIVES ON THE UNITED STATES IN THE POST-COLD WAR PERIOD After the end of the Cold War and the demise of the Soviet Union in December 1991, US South policy was restructured on the premise of dealing with the Indian subcontinent without being an ideological partisan to any party. Its main interest has been to promote regional peace and stability as well as to help reduce hostility between India and Pakistan. While attaching a greater political and economic importance to India, America is equally keen to maintain its friendly ties with Pakistan.

NUCLEARISATION OF SOUTH ASIA South Asia came into a sharp focus with India and Pakistan after carrying out multiple nuclear weapon tests in May 1998. The international community, the United States in particular, condemned these tests fearing that this might trigger off a nuclear race in other volatile regions such as the Middle East and Northeast Asia. America and Japan immediately placed economic and military embargo on India and Pakistan. At the same time, the United States continued mounting pressures on New Delhi and Islamabad to sign the Comprehensive Test Ban Treaty (CTBT) and NPT without any conditions, and also urged them to exercise maximum nuclear restraint. What worried America was the possibility of nuclear exchange since both the countries were perpetually interlocked in a mutual hostility

13

Introduction

over the Kashmir dispute. The US government was not only worried over a nuclear risk emanating from accident and miscalculation but also was concerned about the transfer of nuclear technology by India and Pakistan to sensitive regions like the Middle East or to ‘rogue states’. Despite serious US concerns, both India and Pakistan refused either to roll back their nuclear programme or to sign the CTBT. In effect, the US sanctions against both these countries proved ineffectual. But, however, America has refused to give the de jure status of nuclear weapon power either to India or Pakistan. The 11 September tragedy brought about a dramatic change in the US non-proliferation policy. President Bush not only removed sanctions against India and Pakistan but also reaffirmed that the old arms control and nonproliferation treaties had outlived their utility. The Bush administration’s main concern is to defeat the forces of terrorism and to prevent weapons of mass destruction falling into the hands of terrorist and radical Islamist forces.

US ENGAGEMENT POLICY After the end of the Cold War, the United States has attached more importance to South Asia. It is keen to develop economic and strategic relations with countries like India and Pakistan, prevent nuclear arms race and curb religious extremism and narco-terrorism in the region. The process of ‘greater engagement’ with South Asia began with the Clinton administration, at the fag end of its second term while realising that there was no sense in putting the region ‘at the back end’ of American foreign policy. President Clinton visited India and Pakistan in March 2000. During his visit to New Delhi, he signed a Vision Paper with Prime Minister A. B. Vajpayee to demonstrate US serious concerns about expanding cooperation in myriad fields of mutual interest. Both the leaders agreed to set up a Joint Counter-Terrorism Committee to work together to putting an end to terrorism. President George W. Bush carried his predecessor’s legacy forward. In a bid for transforming US relations with India as a ‘major global player’, President Bush has underlined the need for consulting India on global and regional issues ‘in the same fashion’ as the United States does with regard to other major players such as Japan, China and the European powers. No doubt India and America are coming closer. Military to military cooperation has been expanding rapidly between them. This became manifest from India endorsing the US missile defence programme even

14

MANAS CHATTERJI AND B. M. JAIN

against the wishes of Russia and China with whom India’s relations were on the upswing. Besides, India and the US signed a non-extradition pact in 2002, under which they would not hand over their citizens to the International Criminal Court for trial for committing crimes against humanity. A ‘new page’ in their military ties got a further boost with the undertaking of joint exercises by Indian and American commandos in Ladakh in Kashmir in 2003 for the first time in their post-Cold War relations. These developments reinforced the transformed perception of the American government towards South Asia.

9/11 A radical transformation came about in the strategic environment globally and regionally following the terrorist attacks on America on 11 September 2001, compelling President George W. Bush to lift sanctions against India and Pakistan since both the countries were strategically indispensable for the US global war on terrorism. Nevertheless, some sanctions against India on the transfer of dual-use commercial technology as well as defence related advanced weapons have not been lifted by the United States. In a dramatic development, President Bush’s administration announced in January 2004 that both India and the United States had agreed to expand cooperation in ‘specific areas’ like civilian nuclear and space programmes and hightechnology trade, subject to caveats that India tightens its laws on its transfer of nuclear technology to highly volatile regions like the Middle East. In addition, both the countries agreed to expand bilateral dialogue on missile defence systems. These would, in US-Indian perceptions, assist not only in solidifying their economic and trade ties but also would contribute to peace and stability in Asia and elsewhere.

CURRENT SITUATION Pakistan’s key role in helping American and the allied forces in their mission against destroying Al Qaeda terrorist hideouts in Afghanistan forced the United States to reward Islamabad by committing economic and military assistance worth $3 billion dollars and rescheduling funds from international financial institutions like the World Bank, IMF and Asian Development Bank. Besides, America declared Pakistan as its major ‘non-NATO military ally’ (NNMA), which caused discomfiture to New

15

Introduction

Delhi. India registered its protest with the Bush administration that conferring NNMA status on Pakistan might obstruct the ‘peace process’ between New Delhi and Islamabad. Indian protest did not carry any weight. On the contrary, White House officials offered the same label to India, which the latter had spurned on the ground that this would undermine the rationale and tenets of its non-aligned policy.

THE IRAQ WAR The US-led war in Iraq in March 2003 was opposed by political leaders in South Asia. For instance, the Indian parliament passed a unanimous resolution that India would not contribute its troops to help stabilise the post-war situation in Iraq. An overall regional consensus is that America had no legitimate authority to change the regime in Iraq except by its own people who have an exclusive right to decide the fate of their country. South Asian ruling leaders demanded the restoration of sovereignty and stability in Iraq, and they also pleaded that America should respect international law and abide by UN authority. India, for instance, took a firm stand that the UN should step in to defuse the crisis in Iraq. The post-Iraq War perspectives of the South Asian region focus mainly on ensuring internal stability in Iraq, involvement of local people in the reconstruction of Iraq and an effective UN role in the internal security and stability, as well as the establishment of a democratic regime through internal political processes. Finally, as regards popular perceptions, the vast majority of South Asian people are staunchly opposed to US hegemonic, arbitrary and unilateral policies. But at the same time, they have a greater degree of goodwill and sympathy for American people who have suffered due to Bush’s arrogant and irrational approach of imposing his unilateral policies on the rest of the world. The people of the region look upon America as a ‘land of promise’ and of potential opportunities for education, employment and a far better life, while some sections of conservative South Asianists look upon the American culture of consumerism as dangerous to their indigenous social and cultural values. Nevertheless, the younger generation is quickly attracted towards the American way of life. They are fond of rock dances and pop music, and aspire to live lifestyles on the American pattern. Women in the region, especially from a highly educated, enlightened and urban class

16

MANAS CHATTERJI AND B. M. JAIN

background, are appreciative of the liberal values of American society and its culture. The expectations of the people of the region are that America should play the role of an ‘honest broker’ to help promote friendship and reconciliation between India and Pakistan without intervening in their domestic and external affairs, and to facilitate democratic governance in the region.

FUTURE The future of the US–South Asia relationship would largely depend upon how America treats India and Pakistan in its security and strategic framework. India, for instance, thinks that its diplomatic options in the region have been curtailed on account of the following reasons. First, America has not done enough to help end the Pak-sponsored terrorism in Jammu and Kashmir. Second, America’s deep involvement in the domestic affairs of Nepal by providing it with military assistance, in Indian perception, dilutes New Delhi’s political and strategic influence vis-a´-vis Kathmandu. Thirdly, the US policy of providing military assistance to Pakistan might bolster war jingoism among Pakistani military rulers and that might have negative fallout on regional peace and stability. In conclusion, the US major policy goals in South Asia would continue to focus on a nuclear restrained regime in South Asia, a continued peace process and reconciliation between New Delhi and Islamabad and intensifying the strategic, economic and political relationship with India without undermining its military and strategic partnership with Pakistan as well.

REFERENCES Ikenberry, G. J. (2006). Liberal order and liberal ambition: Essays on American power and world politics. Cambridge: Polity Press. Waever, O. (1995a). Securitisation and desecuritisation. In: R. D. Lipschutz (Ed.), On security. New York: Columbia University Press. Waever, O. (1995b). Identity, integration, and security. Journal of International Affairs (Winter), 48.

PART I INDIA AND PAKISTAN

This page intentionally left blank

A MODEL OF MILITARY SPENDING OF INDIA AND PAKISTAN Manas Chatterji Conflict Management and Peace literature have been developed in the following avenues: (a) Industrial Relations, mediation, and negotiations (b) Peace Studies (c) Peace Economics, and (d) Peace Science. In Peace Science, the Richardsonian model of arms race plays a prominent role. The most comprehensive research in this area is done by Isard et al. (1988). The Richardsonian model links, ‘‘a nation’s arms expenditures to resource constraints (costs), the domestic economy as a whole, forces for optimization and optimal control, diverse strategies and different types of (needs for) weapons development (conventional, nuclear, etc.), policies to reduce unemployment and utilize idle productive capacity in general, deficit and balance-of-payments problems, and the impact of military expenditures on inflation and interest rates. The effects of public opinion (negative and positive), the political party in office, the grievances against and hostility toward its rivals, its ambition and distrust of its opponents, as well as the extent of trade with them and other factors are examined. The influence of the military expenditures and weaponry stocks of a nation’s allies and the allies of its rival upon its own weapons development (for both attack and deterrence purpose) are considered as well as the possibilities of waging economic warfare – through forcing disinvestment upon its rival and the decline of its rival’s productive capacity for weapon development. Uncertainty with respect to future weapons technology, psychological elements, the stocks and capability of its rival’s Conflict and Peace in South Asia Contributions to Conflict Management, Peace Economics and Development, Volume 5, 19–30 Copyright r 2008 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1572-8323/doi:10.1016/S1572-8323(08)05002-9

19

20

MANAS CHATTERJI

weapons, the international climate, and the structure and functioning of the international system are among many other factors looked into as well as the play of organization politics in determining the military budget for any given year’’ (Isard, 1988). The following Richardsonian model is based on grossly outdated political situations. It needs to be overhauled, updated, and made more comprehensive. We now live in a multi-polar world with new phenomenon of globalization, technological change, environmental degradation such as, global warming, weapons (particularly nuclear) of mass destruction, space weapons, and realignment of politics of countries. All these factors can be integrated into a most developed Isard model. It is hoped this will be done in the future. Recently, there has been a great increase in the literature of conflict resolution models. More and more often, realities of the world are being taken into account, and restrictive assumptions are being relaxed. Testing these models is becoming easier because of the development of new concepts and methods to measure qualitative variables. The scope of these models, however, can be enlarged in at least two respects. First of all, spatial relations of the contending parties, that is, geopolitical aspects of the conflict, can be considered. For example, when we look at the map of the Indian subcontinent, we find that the geographical boundaries of two other major powers, namely China and Russia, meet the boundaries of India and Pakistan. In considering political relations between India and Pakistan, this factor is of crucial importance. The second factor is the diverse forces that are acting within the contending parties. The rate of economic growth, population growth rates, and internal peace and stability are a few of the many factors that greatly influence the foreign relations of a country. This is particularly true in Indo–Pakistani relations. The case of India and Pakistan offers an excellent field of study to which we can apply the modern game theoretical approaches for analyzing a mutual relationship. Here we have two countries that are independent from geographic, economic, political, and social points of view. They can gain much by cooperating or lose much by quarrelling, while the great powers, through cooperation, can act as moderating influences. This study casts some light on these aspects and is intended as a beginning toward a more generalized study to be undertaken in the future. The emergence of India and Pakistan as two nations in the Indian subcontinent has ushered in a new phenomenon in Asia. Before 1947, they were a single country whose people struggled together for freedom from British rule. When the British decided to leave, the Moslem minority,

Model of Military Spending of India and Pakistan

21

apprehensive of the Hindu majority, demanded a separate state, which they obtained after a bloodbath, the consequence of religious riots (East Pakistan, a former part of Pakistan, is now Bangladesh). The division of the country resulted in a complete breakdown in the social, economic, and political system of the country. India now has about 850 million people, of which 10% are Moslem, of Pakistan’s 150 million people, there are very few Hindus. The enmity between Hindus and Moslems in India has not ended as a result of the division of the country. These two groups have now become arch enemies, spending millions of rupees in defence preparation. Already they have fought significant wars resulting in loss of lives and resources. The very existence of these two countries depends on their mutual cooperation and friendship. There are many ways through which this friendship can be brought about. This has to be brought about on a government level, on personal levels, and also through the auspices of other countries. One significant step in the right direction would be in the field of disarmament. This paper throws some light on this aspect. It is not intended to provide an easy solution, since conflict between nations is too complicated a matter to be solved easily. This is just a simple approach to conflict resolution taking into consideration the realities as far as possible. Following Richardson (1960), we assume that there are three factors related to the arms race: namely, mutual suspicion and mistrust, cost of military expenditure, and grievances. Let us consider these factors for India and Pakistan in the context of their relationship and other internal and external variables.

INDIA So far as India is concerned, there are two fronts to guard, namely, the borders with Pakistan and China. India is suspicious of both these countries. Thus, it can be assumed that the rate of change of its military expenditure will depend upon the military expenditure of Pakistan and China in the previous period. The lag in time period is appropriate since responses are never instantaneous, and there is always a time lag in intelligence reports. A time lag of 1 year is assumed. So we have the following relation: dM 1t ¼ kM 2ðt1Þ þ nM 3ðt1Þ dt

(1)

22

MANAS CHATTERJI

where M1t represents the military expenditure (rupees in millions) of India for the time period t; M2(t1) the military expenditure (rupees in millions) of Pakistan in the time period (t1); and M3(t1) the military expenditure (rupees in millions or an index number) of Communist China in the period (t1). The left-hand side of Eq. (1) denotes the rate of change of Indian military expenditure. k and n are positive constants, which, following Richardson’s terminology, can be called ‘‘defence coefficients.’’ It is difficult to obtain data for China’s defence expenditure. If they are not available, we can try to employ some index numbers or use some proxy variables. This Eq. (1) represents the mistrust and suspicion on the part of India against Pakistan and China. It is true that mistrust is a qualitative aspect of a state of mind. However, we assume that military expenditure is a satisfactory yardstick for measuring it. The second factor involved in the arms race is the cost of keeping up the defences. It can be assumed that a significant portion of resources devoted to military efforts is a complete waste, while other military expenditures, such as road building, etc., may have some economic value. It is not the purpose of this paper to identify those items as useful and useless, nor do we want to make any estimate of them at this stage. Second, since the investment resources of India are limited, military expenditure implies sacrificing economic development (in terms of increase in the Gross National Product) that would have been achieved if the resources were used for national economic development. The third factor is the amount of benefit that would have accrued to India if these two countries became friendly and cooperated in the field of international trade. In regard to many commodities, such as jute, tea, textiles, etc., the foreign exchange income of both countries could increase appreciably if they cooperated in production and distribution. These three factors have been combined in the following equation: O1t ¼ a1 M 1t þ b1 Y 1t þ c1 T 1t

(2)

O1t represents the cost of defence; Y1t the Gross National Product (GNP) of India at the time period t; T1t the foreign exchange income of India at the time period t; a1 the constant showing what percentage of the military expenditure can be treated as waste; b1 the percentage of Indian GNP that could have increased if there were a friendly relationship between the two countries. In the extreme case, b1 may be taken as the percentage of Indian GNP that could be increased if there is no military spending. Since such a utopian situation is nowhere in sight in the near future, we shall take b1 as

Model of Military Spending of India and Pakistan

23

the percentage of GNP that could be increased if the defence expenditure is kept at a ‘‘normal’’ level. We shall not attempt a comprehensive definition of the term ‘‘normal’’ and shall assume that such a figure has been agreed upon; c1 a constant that shows the percentage of foreign exchange income that could be added with mutual cooperation between these countries. The third factor related to conflict is grievances. For the sake of simplicity, let us assume that India’s grievances against Pakistan consist of two parts: (1) alleged collusion with China and (2) alleged Pakistani inspired rebellions in tribal areas of northeastern India. Again, we do not want to verify whether these allegations are true or not but take the grievances as given. These two sources of grievances are assumed to be measurable in monetary terms. Some portion of them – say, military help from China to Pakistan – is measurable. The following equation then represents the third factor: Q1t ¼ d 1 AC 2t þ e1 I 2t

(3)

where Q1t is the grievance of India against Pakistan at time period t; AC 2t the military help from China to Pakistan in the time period ‘‘t’’ (rupees in millions); I2t the ‘‘Help’’ (assumed to be expressed terms of monetary value) by Pakistan to the tribal rebels in northeastern India (rupees in millions). d1 and e1 are respective weights given by the Indian government to match these threats. These constants can also show what amount of money has to be spent by India to face these dual fronts. The grievance equation involves some qualitative aspects, which are assumed to be expressed in quantitative terms. It is easy to identify other ‘‘costs’’ and ‘‘grievances,’’ but for the sake of simplicity we assume that all these items can be expressed through the variables we have considered. Combining the three factors together, we have dM 1t ¼ kM 2ðt1Þ þ nM 3ðt1Þ  O1ðt1Þ  Q1ðt1Þ dt

(4)

which states that the rate of change in Indian military expenditure equals the sum total of three factors in the previous period. Substituting the values of O1(t1) and Q1(t1) from Eqs. (2) and (3), respectively, into Eq. (4) we get dM 1t ¼ kM 2ðt1Þ þ nM 3ðt1Þ  b1 Y 1ðt1Þ  c1 T 1ðt1Þ þ d 1 AC 2ðt1Þ þ e1 I 2ðt1Þ dt (5) Let us consider the question in regard to Pakistan.

24

MANAS CHATTERJI

PAKISTAN The reasoning in this case is similar to that of India with some variation. The ‘‘mistrust’’ equation is given by dM 2t ¼ 1M 1ðt1Þ dt

(6)

where 1 is the defence coefficient for Pakistan. When we consider the ‘‘cost’’ equation, an additional factor is involved. One of the basic problems in Pakistan was the feud between its two wings, that is, East Pakistan and West Pakistan. The people in these two wings were as different as can be except for their common religious bond. East Pakistan had 55% of the population of Pakistan. It was mostly agricultural, and its per capita income was much lower than that of West Pakistan. The political power rested with the leaders of West Pakistan. Again, these two wings are separated by a thousand miles of Indian territory. East Pakistan had certain disadvantages to start with. If there is increased defence spending, resources for development will be scarce and the difference between the per capita incomes of the two wings will increase, leading to interregional dissension. The cost equation is given by1 O2t ¼ a2 M 2t þ

b2 Y2t ðY W t  Y E2 tÞ þ C 2 T 2t þ b02 2 P2t PW 2t

where M2t represents the military expenditure of Pakistan at the time period ‘‘t’’ (millions of rupees); Y2t the GNP for Pakistan at the time period ‘‘t’’ (millions of rupees); Y W 2t the Gross Regional Product for West Pakistan at the time period ‘‘t’’ (millions of rupees); P2t the total population of Pakistan (in millions) at the time ‘‘t’’; PW 2t the total population of West Pakistan (in millions) at the time ‘‘t’’; PE2t the total population of East Pakistan (in millions) at the time ‘‘t’’; T2t the foreign exchange income of Pakistan at the time ‘‘t’’. a2, b2, b02 , c2 are constants having a similar meaning as in the case of India. Thus we have E P2t ¼ PW 2t þ P2t

(7)

E Y 2t ¼ Y W 2t þ Y 2t

(8)

As regards grievances, Pakistan’s fixed grievance is the possession of Kashmir, which is an Indian state. Pakistan claims it since the majority of its

25

Model of Military Spending of India and Pakistan

inhabitants are Moslems. The second grievance is variable concerning the alleged repression of Moslems in India. So the grievance equation is given by (9)

Q2t ¼ K þ R1t

where K is the grievance for Kashmir; R1t the alleged repression of Moslems in India. So the complete equation is dM 2t ¼ 1M 1ðt1Þ  O2ðt1Þ þ Q2t dt

(10)

or YW Y E2ðt1Þ Y 2ðt1Þ dM 2t 2ðt1Þ ¼ 1M 1ðt1Þ  a2 M 2ðt1Þ  b2  b2  dt P2ðt1Þ PW PE2ð1Þ 2ð1Þ

!

 C 2 T 2ðt1Þ þ K þ R1t

ð11Þ

Reducing the above differential equation to a difference equation we have  W  Y 2t Y 2t Y E2t M 2ðtþ2Þ  M 2ðtþ1Þ þ a2 M 2t ¼ 1M 1t  b2  b02  P2 PW PE2t 2t  C 2 T 2t þ K þ R1t

ð12Þ

Note that W W W W W YW Y E2t Y W Y2t  Y W YW 2t 2t 2t 2t P2t  Y 2t P2t  P2t Y2t þ P2t Y 2t  ¼  ¼ W PW PE2t PW P2t  PW PW 2t 2t 2t 2t ðP2t  P2t Þ

¼

W YW ðY W YW 2t ðP2t =P2t Þ  Y2t 2t =rÞ  Y2t 2t  rY 2t ¼ ¼ W P2t ð1  rÞ rð1  rÞP2t P2t  P2t

¼

YW 1 Y2t 2t  rð1  rÞP2t 1  r P2t

ð13Þ

where r ¼ ðPW 2t =P2t Þ Putting Eq. (13) into Eq. (12) and working with per capita income Y2t y2t ¼ (14) P2t yW 2t ¼

YW 2t PW 2t

(15)

26

MANAS CHATTERJI

we get after some simplification  2 b2  b0 M 2ðtþ2Þ  M 2ðtþ1Þ þ a2 M 2t ¼1M 1t  y2t b2  1r W y t  ðb0 Þ2 2  C 2 T 2t þ K þ R1t 1r

ð16Þ

Again we have the second order nonhomogenous difference equation. To solve it we made the following substitutions in the same manner as we did before. p M 1t ¼ S0 þ a1 bt1 þ bSin t 2

(17)

which notes that Indian military expenditure is of a modified exponential type plus cyclical variation due to occasional threats from China. S0 is the asymptotic value; b is the rate of growth of military expenditure; is the difference between the asymptotic value and the defence expenditure at t ¼ 0, and b measures the intensity of cyclical variation. The second simplification is y2t ¼ y02 ðt þ x2 tÞ

(18)

where y02 is the per capita income at t ¼ 0, and x2 is the constant rate of growth of per capita income. The same type of relation is assumed to be true for West Pakistan as given by 0 W YW 2t ¼ y2 ð1 þ x2 tÞ

(19)

T 2t ¼ f2 y2t

(20)

Again as before

Notice that for the sake of algebraic simplification we have sued the per capita income (and not GNP) in explaining foreign exchange income. Finally, we have ðK þ R1t Þ ¼ y2t

(21)

Making these substitutions in (16) and simplifying (also substitute 1 ¼ k/4 since the population of India is about four times that of Pakistan),

Model of Military Spending of India and Pakistan

27

we get M 2ðtþ2Þ  M 2ðtþ1Þ þ a2 M 2t   kS 0 þ b2 y02 Bt1 kb p 0 0  C2 f2 y2 þ y2 þ a1 k þ sin t ¼ 4 2 4 4   0 b2 y2 0 W 0 0 þ b2 x2 y2 þ ðx2  x2 Þ  c2 f2 y2 x2 þ xy2 x2 t 1r

ð22Þ

We can solve this equation, and as before, it will be like  pt2  p k ; cos M 2t ¼ t; bt2 ; sin t; ; s0 ; y02 ; b1 ; c2 ; f2 ; x; d1 ; b1 ; b; b2 ; r; x2 ; xW 2 2 4 2 (23) At the end of the paper we have given the definition of the constants. Ignoring the constants  p  p  (24) M 2t ¼ t; bt1 ; sin t ; cos t 2 2 Solving the Eq. (5), a similar equation like (24) involving M1t can be written in terms of b2t. Eq. (24) gives the expression for military expenditure of India and Pakistan, respectively, in terms of other variables and a set of constants. The parameters b1 and b2 involved in these two expressions can be termed as decision parameters. If, for example, India wishes to change b1 at a particular point of time, then b2 will also change throughout M2t in (24) and this value will affect M1t in (24) and consequently b2 through (24) give the response curve for India and Pakistan, and each country will try the best ‘‘response’’ via these two equations. Let us next consider another interesting factor. The military expenditure in each country equals the maximum amount each country can afford plus the foreign aid. So we write R M 1t ¼ g1 ðt; P1t ÞY 1t þ AUS 1t þ A2t

(25)

C R M 2t ¼ g2 ðt; P2t ÞY 2t þ AUS 2t þ A2t þ A2t

(26)

The Eq. (25) states that the military expenditure of India equals disposable (for defence) GNP plus aid from the USA and the USSR. The case is the same for Pakistan in (26) considering Chinese help. It is to be noted that in talking of ‘‘disposable’’ military expenditure, we take into

28

MANAS CHATTERJI

account population growth and time (a proxy variable for good and bad harvests). If our goal is to see that at any future time period T, the sum of M1T and M2T becomes minimum, then the problem can be stated in the following fashion: choose the decision parameters b1 and b2 at each point of time t such that at the time period T. Total military expenditure ¼ M1T and M2T is minimum subject to:  p p  (I) M 1t  g t; bt2 ; sin t; cos t 2 2  p p  (II) M 2t  f t; bt1 ; sin t; cos t 2 2 M 1t  g1 ðt; P1t ÞY 1t þ AUS 1t þ AR1t

(III)

R C M 2t  g2 ðt; P2t ÞY 2t þ AUS 2t þ A2t þ A2t

(IV)

In simple language, the growth path of defence expenditure should be such that at each point of time each country will give the ‘‘best’’ response to the other and at the same time keep within its budget. It is interesting to note from (I)–(IV) that if during the time period foreign help from the USA and USSR decreases very much, or if these countries cooperate in striving toward peace in the Indian subcontinent, or if in a particular year excessive population or low GNP or both force the governments to slow down defence expenditures, then the value of b1 and b2 will be restricted. We shall not attempt to solve the above dynamic programming problem. It is quite complicated, and we do not have information about the value of the constant involved in the response equation. For the initial period for any b1 there will be an M1 and consequently b2 and then an M2. These initial values will be determined through I and II. This (M10, M20) point can lie anywhere above E0. At this stage, restrictions III and IV apply. So the initial point is restricted. If E0 is the chosen minimum point, we proceed as before and get another point E1, and so on. For each set of equilibrium values (E0, E1y) we shall get a terminal value M1T þ M2T at the time T. The problem is to choose the set such that M1T þ M2T is minimum. From the discussion above, it is evident that we have made too many assumptions, and in real life, the conflict resolution problem is more complex. In regard to that, it can be pointed out that at this stage I wished merely to present this research as an exercise in the mathematics of conflict

Model of Military Spending of India and Pakistan

29

resolution. In the future, if satisfactory values of the constants are obtained, a numerical solution will be attempted and the model will be tested. The validity of the assumptions can be judged with reference to Indo–Pakistani relations.

CONSTANTS OF THE MODEL INDIA: a b1 c1 d0 d1 d2 d1 e1 f1 g1 h1 K

L0 n Y10

Intensity of the oscillating part for Chinese help to Pakistan Percentage of Indian GNP that could have been increased with ‘‘normal’’ military expenditure Percentage of foreign exchange that could have been increased through cooperation with Pakistan Fixed military help from China to Pakistan Response to Pakistan’s collusion with China Difference between the asymptotic value of defence expenditure and the initial defence spending by Pakistan Growth of GNP per year Indian response to Pakistan’s help to Indian tribal insurgents Ratio of military help to Pakistan from China to the total Chinese military expenditure Ratio of foreign exchange to GNP Money values of grievances as a ratio to GNP Response coefficient, that is, rate of the change in defence expenditure of India in unit time to the defence expenditure of Pakistan in the previous model Asymptotic value for the military expenditure for Pakistan Response coefficient for China from India Initial GNP of India (say in 1950)

PAKISTAN: b b2 b02

Intensity of oscillation in the Indian defence expenditure Percentage of per capita income that could have been increased by ‘‘normal’’ defence spending in Pakistan Percentage of the difference between West Pakistan and East Pakistan per capita income, which could have been decreased through ‘‘normal’’ defence spending

30

MANAS CHATTERJI

b1 c2

Growth of military expenditure per year for India Percentage of foreign exchange that could have been increased through cooperation with India Difference between the asymptotic of Indian defence expenditure and initial value Ratio of foreign exchange to per capita income Ratio of West Pakistan and East Pakistan per capita income which could have been decreased through ‘‘normal’’ defence spending Asymptotic value for military expenditure for India Percentage growth in per capita income in Pakistan Percentage growth in per capita income of West Pakistan related to Pakistan’s per capita income Money value of grievances as a ratio to the per capita income Per capita income for Pakistan at the initial time period, say in 1950 k/4 ¼ Response coefficient

d1 f2 r S0 x2 xW 2 X Y 02 1

NOTE 1. The study was done before the creation of Bangladesh. Admittedly this is a very outdated study. The idea is to suggest a framework for a future most updated study.

REFERENCES Isard, W. (1988). Arms races, arms control, and conflict analysis: Contributions from peace science and peace economics. Written with the assistance of Christine Smith and Charles H. Anderton, Yasushi Asami, James P. Bennett, Bruce Burton, and William Dean. Cambridge University Press (Please look at this book for extensive references). Richardson, L. F. (1960). Arms and insecurity. Pittsburgh: Homewood.

A GAME THEORETICAL APPROACH TO THE COALITION POLITICS IN AN INDIAN STATE$ Manas Chatterji 1. INTRODUCTION In many developing countries and some developed countries, government by coalition is the rule. In the Indian central government for the last two or three decades, there was a coalition of the left or right: on the right, the BJP and like-minded party; and on the left, the secular Congress party, likeminded parties, and the Communist party. This coalition of government politics is very much guided by both domestic and international situations. For example, Congress, the major party in the ruling coalition, is in favour of the USA–India nuclear deal. It was not finalized due to the opposition of its coalition partners, particularly the Communist party. As a result, the deal is almost dead. There are many examples in economic policies that are greatly influenced by coalition politics. The same situation exists in state politics. There is considerable scope in using the material in coalition theory literature to determine when and what type of coalition will form and break

$

The study is grossly outdated. It is presented just to suggest a possible approach to coalition formation and gaming. Hopefully, more sophisticated and updated study will be available in the future.

Conflict and Peace in South Asia Contributions to Conflict Management, Peace Economics and Development, Volume 5, 31–46 Copyright r 2008 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1572-8323/doi:10.1016/S1572-8323(08)05003-0

31

32

MANAS CHATTERJI

the pay off, etc. The subject discussed below of such a situation is based on a grossly outdated scenario. We hope a more up-to-date and sophisticated study will be available not only for India, but also for other countries.

2. BACKGROUND OF THE CONFLICT In many Indian states, conflicts between a multiplicity of political parties and defection of several led to weak governments and, in some cases, bloodshed, chaos and immense hardship for the populace. One such state is West Bengal. Like many other underdeveloped areas, it is suffering from high population, low income, rising migration from the rural areas to Kolkata and other cities, chronic unemployment, and poor public facilities. But what makes West Bengal and Kolkata unique is their continuous political instability and strife. Unlike other states in India, politics here are not based on personalities or caste, but on political ideology. As its chief asset, the area has an articulated, well-informed and determined (often sentimental) intellectual base, which sometimes makes the conflict situation more intense and painful. After the British left in 1946, the Congress party (which controlled the central government) was left in control with the Communist party as their main opposition. Excluding Kerala, the Communist party was the strongest in West Bengal. In 1966, a splinter group led by Mr. Ajoy Mukherjee broke away from Congress and formed a party called the Bangla Congress. We shall denote this party by C (B). Members of this party were veteran Congressmen who had no policy differences with the Congress. Their sole complaint was the so-called corrupt, high-handed leadership of the state organization. C (B) vowed to make a coalition with other opposition parties to defeat the Congress in the election. It is to be noted that at the central government level a rift between two factions within the Congress party evolved over the years; one, led by Indira Gandhi (with more radical views and programmes) was called C (R) ; the other (with a more traditional conservative outlook) was called C (O). Although the West Bengal government was controlled by C (O) leaders, they were still paying allegiance to Mrs. Indira Gandhi’s party at the centre, i.e. C (R). In West Bengal, C (B)’s position was very near that of C (R). Its membership and control of the electorate were insignificant compared with that of other opposition parties; its main asset was its leader, Mr. Mukherjee – an unquestionably honest, sincere man – a fact acknowledged even by his enemies. The main opposition party with which C (B) could combine was the

Coalition Politics in an Indian State

33

Communist party (CP). By that time, in line with international developments, this party was divided into two groups: one called CP (M), which was proChinese; and the other CP (I), which was pro-Russian. They became arch enemies, but they had a common goal to defeat the Congress in association with other opposition parties. CP (M) was without question the strongest opposition party, and enjoyed extensive support from the rural areas (except in one district where C (B) had its hold), student communities and the urban labour force. Since CP (M) could not join forces with CP (I) and vice versa, there were actually two United Fronts (henceforth to be referred to as U.F.) against the Congress party in spite of C (B)’s effort to form one unified party. Fourteen parties divided themselves into two groups as shown below. People’s United Left Front (PULF) 1. 2. 3. 4. 5. 6. 7.

Communist part of India – CP (I) Bangla Congress – C (B) Praja Socialist – (PS) Bolshevik Party – (BP) Gorkha League – (GL) Forward Block – (F) Lok Sevak Sangha – (LS) United Left Front (ULF)

1. 2. 3. 4. 5. 6. 7.

Communist Party of India – Marxist, CP (M) Forward Block – Marxist, FB (M) Revolutionary Socialist Party – (RSP) Workers Party of India – (WP) Socialist Unity Centre – (SUC) Samuktya Socialist Party – (SSP) Revolutionary Communist Party – RCP (M)

The birth and growth of the smaller factions and their relationships with the larger parties give us rich material for game theoretical and conflict resolution studies. In these smaller parties, it is ideology, rather than personality or group interest that provides the dominant motivational force. ULF is an extreme left coalition with CP (M) as the leader. The other parties in this coalition have very little strength unless accompanied by CP (M). The consequent gain to PULF is not substantial in terms of seats in the assembly, but would enhance its prestige in the eye of the public, which, as mentioned before, is articulate and sensitive, responding even to a minor change in West Bengal politics.

34

MANAS CHATTERJI

PULF has no single leader. CP (I) and C (B) are joint leaders. This coalition is left of the centre. CP (I)’s problem is that although it believes in communist ideology, it cannot move too far to the left, since people will label it CP (M) – an uncomfortable position not only from an ideological viewpoint, but also in regard to the preservation of its own independent existence. And CP (I) cannot move far to the right either, since this would mean joining hands with the Congress – a situation it dislikes most, particularly when C (O) leaders dominate the latter. As mentioned before, other members on PULF do not have a serious quarrel with Congress, except in suggesting that the leadership should be changed, i.e. some sort of C (R) should emerge in the state. At this point, it should be mentioned that at the centre, C (R), with Indira Gandhi as the leader, did not have a majority and was dependent on CP (I) and CP (M) to run her government. Strangely enough, CP (I) and CP (M) did not have alternatives. If they opposed her, C (O), with the support of other rightist parties (which, by the way, do not exist in West Bengal), would have formed the government, and that would have been the death-knell for the Communists. The situation at that time was volatile. It was difficult to judge the relative strength of C (O) and C (R). The Communists decided that if they went down, it would be better to join with Mrs. Gandhi, who in the eyes of the Indian people was forward-looking with socialist goals supposedly designed to benefit all. Let us, then, put the parties in West Bengal on a scale relative to the Congress party. The further to the left the position of a party is on this scale, the more it inclines towards CP (M). At the most extreme left position is the Communist party (Marxist-Leninist) – CP (ML) – to which we shall come later. CP (M)

WP RCPI SUC RSP FB (M) SSP CP (I)

CP (ML) ULF

FB PS

BP GL LS C (B) C

PULF

A general election was held in February 1967. Both PULF and ULF opposed the Congress party as the common enemy, but in some constituencies they fought against each other. Although they were united against the Congress, they were far from united amongst themselves in other respects. Thus, the Congress came out as the largest single party in the new assembly but without having captured an absolute majority. The party lost 29 seats in an assembly of 280 and captured only 40.97% of the votes as compared with 47.9% in the 1962 election. One significant aspect of the election is the defeat of the leaders belonging to C (O), so that the party

35

Coalition Politics in an Indian State Table 1.

Party Position after 1967 Election in West Bengal Assembly.

Parties Congress CP (M) Bangla Congress CP (I) Forward Bloc Praja Socialist Party Samyukta Socialist Party Revolutionary Socialist Party Lok Sevak Sangha Socialist Unity Centre Gorkha League Workers Party of India Forward Bloc (Marxist) Swantantra Jana Sangh Independents

Total Number of Members

Rural

Urban

127 43 34 16 13 7 7 6 5 4 2 2 1 1 1 11 280

80 24 30 6 9 6 5 5 4 4 1 1 1 1 1 10 188

47 19 4 10 4 1 2 1 1 – 1 1 – – – 1 92

Note: (a) Three Bangla Congress, one Independent, and the Jana Sangh, MLAs joined the Congress Party in June 1967; (b) nine more Bangla Congress MLAs left the party in October 1967 and sat as Bharatya Kranti Dal MLAs.

seemed to be moving towards C (R) of Mrs. Gandhi. C (B) was not unhappy with this situation. Table 1 gives the relative strength of each party after the election. Following the victory, a U.F. government with 19 members was formed with Ajoy Mukherjee of C (B) as the Chief Minister and Jyoti Basu of CP (M) as the Deputy Chief Minister. Although the head of the government was from C (B), the two Communist parties held crucial portfolios such as finance, land and land revenue, and information and education. Table 2 gives the relative strength of ULF and PULF. From these tables it is seen that excluding the Congress party, CP (M), had balanced control both in rural and urban areas. Individually, CP (I) or C (B) was no match for CP (M). Indeed, in many constituencies people voted for CP (I) – not because they liked its policy, but they supported the U. F., in which CP (M) was the most important party. The U.F. government had an inauspicious start. A new phenomenon emerged in the political scene of West Bengal. It was a movement called the Naxalities, which formed the (Marxist-Leninist) party, or in short, CP (M-L). Originating in a small village in North Bengal bordering Nepal and China, it gradually spread over large parts of West Bengal. This extreme leftist

36

MANAS CHATTERJI Table 2.

Parties 1. PULF Bangla Congress CP (I) Forward Bloc PSP Lok Sevak Sangha Gorkha League Bolshevik Party

2. ULF CP (M) SSP RSP SUC Workers Party Forward Bloc (Marxist) 3. Others

Relative Strengths of ULF and PULF. Number of Seats in the Assembly

Number of Ministers

34 16 13 7 5 2 – – 77

4 2 2 1 1 1 – – 11

43 7 6 4 2 – – 63

3 1 1 1 1 – – 7

13

1

revolutionary movement, composed of students, farmers and hard-core ultraleftist CP (M) members, did not believe in elections and branded CP (M) as revisionist. The Naxalities started killing politicians, landlords and innocent people. These incidents were trivialized by the authorities: the Chief Minister, Mr. Mukherjee, thought that the situation was just a limited agrarian struggle; the CP (M) dismissed it as ‘‘nothing extraordinary’’; and the CP (I) described it ‘‘as a limited problem of agrarian relations and democratic freedom’’. At this stage, international communism entered the scene. The Chinese openly supported CP (M-L) and accused CP (M) and the U.F. of being the ‘‘suppressor[s] of the revolutionary peasants’’. In short, the CP (M-L) movement exerted heavy pressure on CP (M) to come to the extreme left. This was untenable for CP (M) since it would require a break with the U.F. and possibly lead to its destruction since the country itself was not prepared, as CP (M) admitted, ‘‘for an armed revolution’’. On the other hand, partners in the U.F. government complained that CP (M) was trying to strengthen its position through Deputy Chief Minister, Mr. Basu, by infiltrating in both the policy and administration with its own people; and

Coalition Politics in an Indian State

37

was trying to annihilate the partners, in collusion with the Naxalities, and was responsible for the murders and chaos in the state. The situation was so serious that the Chief Minister threatened to resign in October 1967, voicing complaints against some of his own ministers for creating deliberate troubles in industries, inspiring farmers to murder landlords, and inviting China to bring about a bloody revolution in the state. But the time was not ripe for Mukherjee since the Congress party to whom he could turn was not yet out of C (O) power. His CP (M) colleagues agreed to behave. Within a month, however, 16 other PULF members broke away from the party and claimed that they could form government with the help of the Congress. While the Congress did not want to participate in such an undertaking, they tacitly decided to support such a move. The governor of the state (who has no power except in the case of an emergency), acting as the agency of the central government, asked both sides to show their strength of seats in the assembly. Due to some legal difficulties, this could not be done, and the governor, acting on the advice of the central government, dismissed the U.F. government and declared President’s rule. The assembly, however, was not dissolved. Mrs. Gandhi hoped that some sort of coalition could be formed. She was somewhat hesitant to take a drastic step since she was still depending on CP (I) and CP (M) for her government. But the expected coalition did not materialize. President’s rule was had by the U.F., and the people of the state at large regarded it as evidence of some sort of a conspiracy by the central government. The U.F. became more united and prepared to contest the Congress again in a new mid-term election in 1969. This time they dealt a heavy blow to the Congress, which obtained only 55 seats. Table 3 gives the result of the election. As a result of these events, a second U. F. government was formed. CP (M) was much stronger this time, but it could not form the government by itself or even with its closest allies in the ULF, and troubles started again. CP (M) was blamed for the increasing strength of the Naxalite movement, there were inter-party clashes within U.F. and the U. F. government became more and more unworkable. The Congress party became a silent spectator. In the centre, under Mrs. Gandhi’s leadership, C (R) won a sweeping victory at the polls. The Chief Minister, Mr. Mukherjee, of C (B) resigned, and the President’s rule was proclaimed once again. This time Congress tried to change its image, now blaming CCP (M), which it said was leading the state to disaster. They did not have the old leaders of C (O) whom C (B) and its allies hated. The ULF partners also blamed C (M) for these misfortunes. In short, PULF slowly moved to the right, the Congress shifted to the left and allies of CP (M) in ULF moved to the right. CP (M) became more and more

38

MANAS CHATTERJI Table 3.

Result of Mid-term Election.

Parties

Number of Seats

Congress C (R) Bangla Congress C (B) CP (I) Forward Block (FB)þothers Praja Socialist Party (PSP) Lok Sevak Sangha (LSS) Communist Party (Marxist) CP (M) Revolutionary Socialist Party (RSP) Forward Block (Marxist)þOthers FB (M) Samuyukta Socialist Party Others Independent Total

55 33 30 2 5 4 80 12 18 9 26 6 230

isolated. It had bitter clashes with CP (M-L) and was in trouble from both the left and right. After the defeat of Pakistan in the Indo-Pakistani war of 1971 and the emergence of Bangladesh, C (R)’s position became much stronger. In the elections of February 1972, it swept the polls in all states including West Bengal, where out of 280 seats in the assembly the People’s Democratic alliance of Congress (R) and CP (I) captured 252 seats. C (R)’s share was 216 seats. C (B) merged with C (R). CP (M) alleged fraud and was kept out of the assembly. In spite of formal coalitions, C (R) did not have to depend on CP (I). At this time, the law and order situation improved considerably. This was due partly to the popular image of the party created by the then Chief Minister, Mr. Ray, and partly to sympathetic considerations extended by the centre towards West Bengal’s needs and problems. I have very briefly given the basic background of conflict in West Bengal in the 1960s. The whole picture is much more complicated and confused. It can also be viewed in the broader context of the Indian political scene. I have considered only the minimum that is necessary to construct the theoretical structure of the materials in the following two sections:

3. A GAME THEORY INTERPRETATION The following is an example involving the political situation in the Indian state of West Bengal. The brief background given here is necessary in order to understand the structure of the problems.

39

Coalition Politics in an Indian State

Following the events just described, the situation in West Bengal became quiet. But the basic problem was not solved. The law and order situation looked better, but the Naxalites were merely taking a breather. The probability of a recurrence of past events was high; this led to the formation of a U.F. between ULF and PULF or C (R) with PULF. It is not to be forgotten that CP (M), in their smashing defeat in 1972, polled 41% of the total votes. The only difference is that there now appeared four groups in the scene, namely: CðRÞ

CPðMÞ PULF

ULF

At this point in the structure of PULF/ULF will not be the same as it was in the past, but whatever the consequent shifts, the final position will tend to the above four-party structure. In the whole conflict process, for each party, there were two possible strategies. One was to shift to the left and other to the right. But these two options did not have the same connotation to each party. In C (R)’s moving towards the left, the strategy Q1 meant bringing back old Congressmen who had defected, making active efforts for friendship with Russia and Bangladesh, taking strong positions against the USA and China, supporting North Vietnam, keeping the student movement alive but without violence and undertaking programmes of economic development. The other alternative, Q2, signified a move towards the right. It reflected an independent position, without regard for PULF or other parties. Q2 should not be interpreted as low on socialism and high on capitalism, although it may lead to a friendly relationship with the USA. The political scene changes quickly, and such a strategy is entirely possible. For CP (M), the first strategy, P1, denotes the position it has taken so far – no alliance with CP (M-L) but maintenance of the same goals within parliamentary democracy, infiltration of the administrative structures of its members, the use of home portfolios to guide police forces to its advantage, neutrality with the Chinese with mild censure in specific issues like Bangladesh, no compromise with CP (I) and the agitation of students and labourers to keep up a situation of turmoil. In short, looking from the view of ULF partners, it signifies accepting the assistance of the ULF in order to remain in power, encouraging the more radical elements of the ULF to defect to CP (M), keeping up an uncompromising posture towards the USA, expressing strong support for the NLF of Vietnam, and not mentioning the USSR in its support for the NLF of Vietnam. The other position is P2: scaling down its extreme positions, no greed for the home portfolio, toning down its differences with CP (I), voicing strong denunciation of China and

40

MANAS CHATTERJI

mild-criticism of the USSR and giving up the demand of state autonomy/ secession – in short, cooperating with ULF and PULF against C (R) and maintaining a moderate tone while still supporting a radical programme. In the case of ULF, the first strategy, R1, will be to move towards CP (M), and R2 will be towards PULF and C (R). Similarly; for PULF these strategies will be denoted by S1 and S2, respectively. It should be mentioned here that the calibration of the preference scale of ULF to move to the left towards CP (M) – or, for the matter of the right – is not the same type as that of PULF. For example, a given degree of shift by ULF to the left to form a government with CP (M) may not be equivalent to that of PULF moving the same amount to the right to form a government with C (R). This also depends whether C (R) shifts to Q1 or Q2. This situation can be shown as follows: P1 P2 R1 CP (M)

R2 S1 ULF

PULF

S2 Q1 Q2 C (R)

Let us denote a five-point preference scale as follows for each party: 1. 2. 3. 4. 5.

Most preferable Preferable Neutral Not preferable Highly unfavourable

Score ¼ þ1 Score ¼ 0.5 Score ¼ 0 Score ¼ 0.5 Score ¼ 1

I am fully aware of the weakness of this process and the risk involved in dealing with a qualitative scale such as this. But this scale is often used in the literature due to the lack of better approaches. It is also assumed that these preferences can be interpreted as the payoff, and that the sum of these for any particular situation is zero. In essence, then, we are dealing with a fourperson zero sum game. For this game, we have constructed the following payoff Table 4, which will be invariant for all situations. From the payoff matrix, it is seen that for the choice P1Q1R1S1, the payoff to CP (M) is þ1, indicating that it is the best situation for it. ULF and PULF have moved towards it, and it has not changed its own position. All this happened in spite of the fact that C (R) is interested in moving towards the left. This is a bitter disappointment for C (R). Consequently, its payoff is -1. ULF is happy to have a united government against C (R) but remains insecure since it is afraid that CP (M) may destroy it. PULF is not happy since it could not come out with C (R), which has come towards it, and has been forced to cooperate with strange bedfellows. Similarly, take another

41

Coalition Politics in an Indian State Table 4.

Payoff Table for Four-person Zero Sum Game.

Choice CP (M) P1 P1 P1 P1 P1 P1 P1 P1 P2 P2 P2 P2 P2 P2 P2 P2

Payoff C (R)

ULF

PULF

CP (M)

C (R)

ULF

PULF

Q1 Q1 Q1 Q2 Q2 Q2 Q1 Q2 Q1 Q1 Q1 Q2 Q2 Q2 Q1 Q2

R1 R1 R2 R2 R1 R2 R2 R1 R1 R1 R2 R1 R2 R2 R2 R1

S1 S2 S1 S2 S2 S1 S2 S1 S1 S2 S1 S2 S2 S1 S2 S1

þ1 0.5 þ0.5 0.5 0.5 0.5 1 þ1 þ0.5 þ0.5 0 0.5 0.5 0.5 0.5 þ1

1 0 0 þ1 0 þ0.5 0.5 1 0.5 0.5 0 0.5 0.5 0 þ0.5 1

þ0.5 0 0 0.5 0.5 0 0 þ0.5 þ0.5 0 0.5 0.5 0.5 0.5 0.5 0.5

0.5 0.5 0.5 0 0 0 0.5 0.5 0.5 0 0.5 0.5 0.5 0 þ0.5 0.5

choice, P1Q2R2S2. Here CP (M) is unhappy but not especially so since it knows ULF will be reluctant to do business with C (R), particularly if the latter moves to the right. C (R) is very happy to see that PULF and ULF are moving towards it, in spite of the fact that it did not previously care for them. ULF is unhappy and PULF is indifferent. All other cases can be explained in a similar fashion. Suppose now the following coalition situation takes place. The question is: What will be the equilibrium choice situation? It can be explained as follows: Then the payoff matrix for CP (M) will be given by: Payoff Matrix for CP (M) Q1R1S1 Q1R1S1 Q1R2S1 Q2R2S2 Q2R1S2 Q2R2S1 Q1R2S2 Q2R1S1 P1 P2

þ1 0.5

0.5 þ0.5

0 0

0.5 0.5

0.5 0.5

0.5 0.5

1 0.5

þ1 þ1

(ii) Congress vs. others. The game has a saddle point, and the resulting choice is P2Q1R2S2. Although CP (M) expressed a desire to come to an understanding with ULF

42

MANAS CHATTERJI

and PULF, they have moved instead to the right towards C (R), which in turn moved to the left. The payoff matrix for Congress is given by: C (R) P1R1S1 P1R1S2 P2R1S1 P2R2S1 P1R2S1 P1R2S2 P2R1S2 P2R2S2 Q1 Q2

1 0.1

0 0

0.5 1

0 0

0 þ0.5

0.5 þ1

0.5 0.5

0.5 0.5

Again, there is a saddle point at Q2P1R1S1. Interestingly enough, this was the situation when Congress (R) was dominated by rightist leaders and ULF and PULF moved rigorously to the left with CP (M). If we consider the coalition between CP (M) and ULF vs. C (R) and PULF, then the equilibrium situation will be P2R1S2Q1, which means CP (M) has to move to the left and PULF to the right. This is a reasonable potential position for each. In future, there may be three contesting parties in the political scene: C (R), CP (M) and others, comprising a third group forming coalitions with either of the other two and leading to a similar game theoretical situation. A three-person non-zero sum game may arise with the central government as the fourth party forcing a zero sum game. Until that happens, the fourparty situation would persist. The interesting point is that the two groups, PULF and ULF, are placed in a situation similar to the prisoner’s dilemma. If PULF stands alone and does not cooperate with ULF in supporting CP (M) or C (R), then it will receive severe punishment no matter who wins, but ULF will be rewarded with power in the government and vice versa. If they cooperate in supporting the winning party, both will be rewarded. The payoff matrix in the prisoner’s dilemma case appears as follows (C – denotes cooperation, D – denotes defection).

PRISONER’S DILEMMA PULF

ULF

C2

D2

C1

R,R

S,T

D1

T,S

P,P

Coalition Politics in an Indian State

43

In the tables above, C1 and C2 refer to the strategies of ULF and PULF in cooperating in the election or on issues facing the state. The reward corresponding to the strategy is denoted by R. It is assumed, as is generally the case in prisoner’s dilemma situations, that they are the same. The situation C1 and D2 denotes that ULF cooperates, i.e. takes an independent stand and stands alone in the election, whereas PULF forms a coalition with C (R) and gets more than its parity-norm share due to the strategic aspect of the game; then, ULF receives the punishment. The C2 D1 denotes the opposite situation, where PULF cooperates, but ULF defects to CP (M). If they both defect, i.e. if they do not cooperate in taking joint actions, they will receive punishment P. The rewards in this matrix can be measured in terms of the number of seats in the ministry, percentage of popular votes and such things as the image in the public eye, ideological considerations, etc. With this framework, if a sufficient number of observations were available regarding the behaviour of PULF and ULF, it would be possible to estimate (following a Markov Chain approach) the probability that they will cooperate in a particular case given their behaviour on previous occasions. Since the time period is too short to generate such data, we cannot make such estimates. However, if we trace back the history of their behaviour on issues rather than focusing on the formulation of election time coalitions, such estimates can be made. Alternatively, we could look at similar coalition politics in other states of India and make some estimates. In this research, I have tried in a small way to apply some game theoretical concepts to the political events in the state of West Bengal in the past decade. This type of approach, if properly carried out, can effectively explain the behaviour of political parties in a coalition situation in India and in other developing countries. It can also be applied in formulating cooperate procedures to solve intergroup/interstate problems leading to the efficient utilization of scarce resources for the benefit of all concerned.

4. CONCLUSION The situation in India and West Bengal, in particular, has changed significantly in recent years, particularly with the assassination of the late Prime Minister, Rajiv Gandhi. The Congress party has become friendly with CPI, and the rest of PULF has either joined Congress or have become nonexistent. CP (M) has not moved towards Congress. It is interesting to note that more recently there has been a decline in the power of both Congress and CPI. Furthermore, the international situation has changed significantly.

44

MANAS CHATTERJI

It is hoped that a more comprehensive model incorporating these new developments will be forthcoming in the future.

4.1. Coalition Theory In many conflict situations, participants form groups or coalitions. That way, they can obtain payoffs which they may not receive if they act individually. The questions that naturally arise in regard to these situations are: which of the possible coalitions will form, are the coalitions stable and what are their payoffs? Following Isard and Smith (1982), we may stipulate a number of reasonable prerequisites for a coalition. It should be efficient, meaning there is no other coalition that will give the participant a higher payoff. It should be simple in the sense that the participants can make the necessary computations. The normality principle stipulates equity considerations; strategy property will ensure strategic potential of the coalition. The possible scenarios can be explained with the help of an example. Suppose there are three participants described by i ¼ 1, 2, 3. These participants may be leaders of the political parties controlling Wi votes (i ¼ 1, 2, 3). For the sake of simplicity, let us assume W1 ¼ 25, W2 ¼ 30, W3 ¼ 45, which can be termed as the decision weight. The critical weight W is defined as a weight that for the coalition is a winning coalition. In this case it is W ¼ 51. Any coalition denoted by C will be a winning coalition if its weight W (C) WW. In our case, coalitions (1, 2), (2, 3) and (1, 3) are all winning coalitions. It is clear here that no participant has veto power, no two coalitions can form simultaneously and no single participant can control a decision. If there is a winning coalition, then the payoff (say $10 m) has to be divided according to the Wi/W(C) ratio; i.e. the share of demand for each participant in the coalition payoff must be proportional to its relative contribution to that coalition. This is known as the parity-norm principle. For example, the payoff outcome in the (1, 2) winning coalition will be (4.54, 5.46, 0.0). However, participant 3 can induce the first participant to form a coalition with him by giving her a higher payoff. Thus (1, 3) coalition may be formed with the payoff function (4.54þ, 0, 5.46). This payoff can be termed as the defection payoff. However, the defection process can go on indefinitely. So from the point of view of the parity-norm principle, the coalition (1, 2) may be the cheapest winning coalition. The coalition is cheapest in the sense that the ith relative contribution Wi/W (Ci) yields him a maximum share of $10 m, i.e. ith relative

Coalition Politics in an Indian State

45

contribution is maximum. Of course, the participants may work to form an all-party coalition and divide the payoff equally. But to do so, is to ignore the existence of the coalition situation altogether. The question that remains to be answered is whether it is possible to construct a coalition satisfying both the equity and strategic aspect of the coalition. Isard (1967) calls this a coalition compromise procedure. In the case of this procedure, there are two phases, namely an intracoalition phase and an inter-coalition phase. We first construct the intracoalition compromise (1, 2), (1, 3) and (2, 3) and the corresponding payoff p1,2=(4.54, 5.46, 0), p2,3=(3.56, 0, 6.44), p1,3=(0.4,6) based on the paritynorm principle. We take the coalitions as participants and compute the inter-coalition weights (i, j ¼ 1, 2, 3) W ði; jÞ ¼ W i; j =ðW 1;2 þ W 1;3 þ W 2;3 Þ where W i; j ¼ W i þ W j . This process gives the payoff (1.25, 1.50, 2.25). If instead of a parity-norm procedure, the split-the-difference procedure is adopted, then the compromise solution will be 1/3(p1,2þp1,3þp2,3) ¼ (1.35, 1.58, 2.07). While it may not be possible to form a winning coalition, all winning coalitions are not strategically equivalent. For example, in the present example, the members in the mutually cheapest coalition (1,2) may be considered in relatively stronger positions than other participants. To consider this strategic aspect, we can reconsider the disruptive coalitions, d1,3 and d2,3, based on modified parity norm shares in the intra-coalition and the split-the-difference procedure in the inter-coalition stage. The final compromise position will be 1/3(d1,2þd1,3þd2,3) ¼ 1/3(1.51þ1.82þ1.67). However, just as all winning coalitions are not strategically equivalent, neither are all coalitions disruptive. For example, (2,3) coalitions will not be as disruptive since 3 can do better by enticing 1 rather than 2. A modified situation may result if there is a series of disruptive coalitions leading to an equilibrium payoff. The situation becomes more complicated when it is extended to n (more than three) participants. This procedure also assumes that: a. social actions are continuous and convex b. preference orderings of the social functions can be represented by continuous utility functions c. the procedures have only touched few strategic relevants There may be other possibilities. In many countries, both developed and developing (such as in India), coalitions with left and right wing parties have become the norm. It will be

46

MANAS CHATTERJI

very interesting to study the dynamics of these coalitions and the causes for their formations and their breaking up.

REFERENCE Isard, W. & Smith, C. (1982). Conflict analysis and practical conflict management procedures: An introduction to peace science. (Please refer this book for extensive references.) Cambridge, MA: Ballinger publishing co.

EVIDENCE OF ASYMMETRIC COINTEGRATION BETWEEN THE MILITARY EXPENDITURES OF INDIA AND PAKISTAN Nadir O¨cal and Julide Yildirim 1. INTRODUCTION An important issue in defense economic literature has long been the modeling the arms race between rival countries. However, although various specifications with different data sets have been employed, little has been found in favor of a clear-cut arms race between the rivalries. Brauer (2002) and Dunne, Nikolaidu, and Smith (2005) provide excellent literature survey regarding the advantages and disadvantages of various specifications in modeling the arms race and/or data measurement issues leading to poor results, particularly in the case of Turkey and Greece. The possible arms race between India and Pakistan has also been a topic of interest for many researchers as the two have maintained a hostile relationship with one another since their creation as separate states in 1947. The religious differences between the two countries are believed to be the main reason of the partition and ongoing hostility, which led to an arms race (Tibbett & Akram-Lodhi, 1997; Deger & Sen, 1990; Alexander, 1987; Ganguly, 1995).

Conflict and Peace in South Asia Contributions to Conflict Management, Peace Economics and Development, Volume 5, 47–56 Copyright r 2008 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1572-8323/doi:10.1016/S1572-8323(08)05004-2

47

48

NADIR O¨CAL AND JULIDE YILDIRIM

The arms race between India and Pakistan has received considerable attention in the literature, but the empirical results cannot reach an agreement about the nature of the possible relationship between the military expenditures of the two countries. Oren (1994) reviews the earlier literature on the Indo-Pakistani arms race and argues that the empirical results are contradictory. His review shows that there is evidence both in favor and against the arms race between the two countries. Deger and Sen (1990) report an asymmetric arms race between India and Pakistan, with Pakistan responding to Indian military spending. Moreover, Dunne, Nikolaidou, and Smith (2003) and Yildirim and O¨cal (2006) report that there is a bidirectional causality between the military expenditures of the two countries. This arms race may be responsible for the retarded economic growth in India in the long-run rather than in Pakistan, even though one would expect a negative impact for the Pakistani economy due to its relatively small size compared to India (Yildirim and O¨cal, 2006). As pointed out in Brauer (2002), Dunne et al. (2005), and Dunne and Smith (2007) in the case of Greece and Turkey, statistical models, problems regarding military spending data, and sensitiveness of specifications to data1 may be the possible reasons of conflicting results. However, although specification issues are shown to be among the reasons for the poor results of earlier literature, researchers, with a few exceptions, do not seem to be seriously considering alternative specifications such as nonlinear models. There are now several papers employing nonlinear specifications and providing empirical evidence that the relationship between the military expenditures of the rivalries may be asymmetric, for example, in O¨cal (2002, 2003), Smith, Sola, and Spagnolo (2000b), and Refenes, Kollias, and Zapranis (1995). O¨cal (2003) employs logistic smooth transition regression models to investigate the Indo-Pakistani arms race and finds evidence that the variables under investigation have an asymmetric relationship. If two countries are engaged in an arms race, the application of linear cointegration methods is now a common practice to uncover the long-run relationship between military expenditure data. Nevertheless, when the adjustment process toward long-run equilibrium is asymmetric such an approach is highly prone to produce poor results. Enders and Siklos (2001) argue that under such circumstances employing, for example, the Engle and Granger (1987) cointegration test is likely to lead to misspecification errors and suggest a modeling procedure, which is an extension of the Engle and Granger (1987) cointegration test to account for an asymmetric error correction term. Hence we follow their procedure and consider threshold autoregressive (TAR) and momentum threshold autoregressive (M-TAR)

Evidence of Asymmetric Cointegration

49

models as alternative adjustment processes for the cointegration relationship. The results indicate that although linear cointegration approach does not provide a good characterization of the relationship between the variables, a threshold cointegration specification with an M-TAR type adjustment process does. The rest of the paper is organized as follows: Section 2 introduces the TAR and M-TAR models, describes their features within our context, and discusses the estimation methodology employed. The data and empirical results are discussed in Section 3. The final section concludes the paper.

2. METHODOLOGY This paper employs the nonlinear cointegration modeling procedure of Enders and Siklos (2001) under the assumption that adjustment to long-run disequilibrium can either be in the form of TAR adjustment process or can be that of M-TAR process. The entire procedure can be outlined as follows: 1. Carry out Engle and Granger’s (1987) two-step cointegration testing procedure. Thus, in the first step, the procedure requires the OLS estimation of the following simple long-run equilibrium relationship: Y t ¼ a þ bX t þ t

(1)

where Yt and Xt are nonstationary variables of the same order, and et is the stochastic disturbance term measuring the deviation from the equilibrium relationship between Yt and Xt.2 2. The variables Yt and Xt are said to be cointegrated, if the residuals ^t from the OLS estimation of Eq. (1) are stationary. Hence, the second step entails testing the stationarity of the ^t sequence, and this can be achieved by the OLS estimation of the Eq. (2) presented below. D^t ¼ r^t1 þ nt

(2)

where D is the difference operator and nt is an i.i.d. disturbance term with mean zero. If the null hypothesis r ¼ 0 is rejected ^ t sequence is stationary. Note that, in Eq. (2), the change in ^t is r^t1 is irrespective of whether deviation from equilibrium relationship (^t1 ) is below or above the longrun equilibrium implying that adjustment process toward long-run equilibrium is symmetric.

50

NADIR O¨CAL AND JULIDE YILDIRIM

3. As Eq. (2) is misspecified when the adjustment process is asymmetric, consider threshold cointegration testing procedure to account for the possible asymmetric adjustment to disequilibrium in two alternative ways: see Enders and Siklos (2001). To implement a threshold cointegration test of TAR type respecify the Eq. (2) as: D^t ¼ I t r1 ^t1 þ ð1  I t Þr2 ^t1 þ

p X

ai D^ti þ nt

(3)

i¼1

where, It is Heaviside indicator function, ( 1 if t1  t It ¼ 0 if t1 ot

(4)

t is threshold value, nt B i.i.d. (0, s2) and the lagged values of D^t may be needed to render uncorrelated residuals. The condition 2o(r1, r2)o0 is necessary for ^ t sequence to be stationary. This TAR setting of ^t sequence allows for asymmetric adjustment process as follows: If Yt1WaþbXt1, that is if ^ t1 4t, the speed of adjustment in Eq. (4) is r1. However, when Yt1oaþbXt1, that is, ^t1 ot, the speed of adjustment is r2. Thus for a threshold value t ¼ 0, the adjustment process is distinct for negative and positive shocks with the positive deviations from the threshold being more persistent than negative ones if, for instance, 2o r2or1o0. In order to carry out the threshold cointegration test of M-TAR type, requantify the Heaviside indicator function according to following rule: ( 1 if Dt1  t It ¼ (5) 0 if Dt1 ot Enders and Granger (1998) call Eq. (4) with the Heaviside function (5) a Momentum-TAR model since it can capture the asymmetric dynamics such that the series exhibits more momentum in one direction than the other. For example, for a threshold value t ¼ 0, if |r2|o|r1|, increases in positive discrepancies from the threshold will be less persistent than the increases in negative discrepancies in M-TAR model. If two countries are engaged in an arms race, the reaction to the opponent may be more pronounced when the gap between the military expenditures gains more momentum in favor of rival country. Then the dynamics captured by M-TAR model may be more appropriate, as in this case.

51

Evidence of Asymmetric Cointegration

4. Carry out the cointegration test in both TAR and M-TAR models by testing the null hypothesis H0: r1 ¼ r2 ¼ 0 with F-test that have nonstandard distribution and denoted as Fm and Fnm for TAR and M-TAR specifications, respectively. Critical values of these statistics are tabulated in Enders and Siklos (2001). 5. If the existence of threshold cointegration is verified in step 4, test the null hypothesis H0: r1 ¼ r2 with a standard F-test to detect the possible asymmetry within the cointegration relationship. This last test requires the consistent estimation of the threshold parameter t and this is achieved by following the estimation method suggested in Chan (1993). To be more specific, the method based on the idea that if threshold variables ^t1 and D^t1 are ascendingly ordered and TAR and M-TAR models are estimated for each value of them, the model providing the smallest sum of squared residuals delivers the consistent estimation of the threshold parameter. After finding a satisfactory threshold model, one can then fit asymmetric error correction model to uncover the asymmetric adjustment dynamics toward the long-run equilibrium.

3. DATA AND EMPIRICAL RESULTS The military expenditure data of India (IND) and Pakistan (PAK) are obtained from SIPRI yearbooks for the period 1949–1999. We employ the logarithms of the variables and follow the procedure suggested in Enders and Siklos (2001) to estimate the threshold models outlined in Section 2. OLS estimation of the long-run model needs a linear trend and delivers the following results:3 INDt ¼ 4:538 þ 0:406PAKt þ 0:069TREND þDUMMIES ð14:55Þ

ð7:456Þ

ð10:22Þ

(6)

The values in parenthesis are t statistics and show that all coefficients are significant at 1% significance level.4 The residuals of model (6) are then employed for testing linear cointegration. The results are shown in the second column of Table 1. According to Akaike Information Criterion (AIC) and Ljung-Box Q-test for serial correlation, the estimated model corresponding to model (2) requires one lagged change to render autocorrelation free residuals. The t-statistic for the coefficient of ^t1 is 3.803 suggesting that the null hypothesis of no cointegration is hardly

NADIR O¨CAL AND JULIDE YILDIRIM

52 Table 1.

r1 r2 a1 t AIC Q(4) Sk Ku JB Fnu r1=r2

Threshold Cointegration Test Results.

Engle–Granger

Threshold Consistent (t ¼ Unknown)

Momentum Consistent (t ¼ Unknown)

0.449 3.804 NA

0.300 1.875 0.597 3.751 0.260 1.887 0.0797 64.626 0.806 0.517 0.680 0.726 8.311 0.177

0.768 4.230 0.276 2.019 0.300 2.226 0.0196 67.769 0.701 0.727 0.782 0.897 10.385 0.029

0.258 1.855 NA 64.662 0.823 0.254 0.408 0.337 NA NA

Where r1, r2, and a1 are estimated values with t-statistics presented below. AIC is the Akaike Information Criterion, Q(4) the Ljung-Box Q-test for serial correlation of order 4, Sk the skewness, Ku the Kurtosis, JB the Jargua-Bera Normality test, and p values are given. Fnu is sample values of threshold cointegration tests for TAR and M-TAR models, respectively. r1 ¼ r2 is r value of the F-test for testing symmetric adjustment.  and  indicate the significance at 5 and 1% significance levels, respectively.

rejected at 5% significance level.5 However, as mentioned before, if the adjustment process is asymmetric, Eq. (2) is misspecified and may lead to wrong inferences. In order to carry out TAR and M-TAR type threshold cointegration tests, the residuals of model (6) are also used to estimate model (3) with Heaviside functions (4) and (5) assuming that threshold parameter t is unknown. Enders and Siklos (2001) point out that when the threshold value is unknown inferences related to individual values of r1 and r2, and test for symmetric adjustment r1 ¼ r2, is problematic.6 Therefore, one needs a consistent estimation of the threshold parameter in order to implement the test for symmetric adjustment. In our case, since the true threshold value is unknown and there is no a priory information to assume a specific value for the threshold parameter, we need to estimate threshold parameter as well as r1 and r2. Chan (1993) proposes an estimation procedure providing the consistent estimation of the threshold, which is utilized here as follows. For both TAR and M-TAR models, threshold variables ^t1 and D^t1 are

53

Evidence of Asymmetric Cointegration

ascendingly ordered and 10% of the observations excluded from both ends. Next, TAR and M-TAR models are estimated for each of the remaining candidate threshold values. The consistent threshold estimate is the one providing the smallest sum of squared residuals. Table 1 shows the results of the estimated consistent TAR and M-TAR models, their diagnostics and threshold cointegration test values. A threshold value of 0.0797 delivers the smallest sum of squared residuals for the TAR model and an estimated model with this value is provided in column 3 in Table 1. The model passes all diagnostic tests after including the one lagged change of the dependent variable D^t1 . The sample value of Fu statistics is 8.311, and with this value the null hypothesis of no cointegration can be rejected at 5% significance level. It is also important to note that although the estimates of r1=0.299 and r2=0.597 appear to suggest asymmetric adjustment, the null hypothesis of symmetric adjustment cannot be rejected even at 10% significance level. Moreover, the value of AIC implies that TAR model does not provide a better fit compared to the others. These results confirm that there is not a TAR type cointegration relationship between our variables. The results of M-TAR with consistent estimation of threshold are shown in column 4 of Table 1. The null hypothesis of no cointegration can now strongly be rejected at 1% significance level. Moreover, according to AIC, this model is the only model providing a better fit than the Engle–Granger model. The consistent estimate of threshold parameter is 0.0196 and the estimates of r1=0.768 and r2=0.276 imply convergence. The sizes of two coefficients are quite different suggesting the possibility of asymmetric adjustment toward the long-run equilibrium, and this is verified by rejecting the null hypothesis of symmetry at less than 5% significance level as shown in the last row of Table 1. This asymmetric adjustment implies that increases in divergences from long-run equilibrium arising from either decrease in the IND and/or increase in PAK (i.e., D^t1 o0:0196) are more persistent than other changes. Our results strongly suggest the existence of asymmetric cointegration with M-TAR adjustment. The corresponding asymmetric error correction model using the consistent estimation of threshold parameter (with p-values in parenthesis) is: DINDt ¼ 0:052 þ 0:481DINDt1 þ 0:077DPAKt1 ð0:001Þ

F 11 ¼ð0:002Þ

F 12 ¼0:033

 0:572I t ^t1  0:189ð1  I t Þ^t1 ð0:001Þ

ð0:130Þ

(7)

NADIR O¨CAL AND JULIDE YILDIRIM

54

DPAKt ¼ 0:119 þ 0:449DINDt1  0:312DPAKt1 þ 0:081ð0:861Þ I t ^t1 ð0:030Þ

F 21 ¼0:322

F 22 ¼ð0:045Þ

þ 0:185ð1  I t Þ^t1

(8)

ð0:612Þ

AIC ¼  423:803 According to the p-values of the error correction terms, IND adjusts to discrepancies from the long-run equilibrium, whereas PAK does not. Indeed for Pakistan these terms have the wrong signs. The coefficients of error correction terms in Eq. (7) is 0.572 when D^t1  0:0196 and 0.189 when D^t1  0:0196, implying that IND adjusts much faster in the first case compared to the second one. The asymmetric error correction model permits us to test for short-run dynamics between the changes in the military expenditures. The F-statistics corresponding to causality reveal that although Pakistan military expenditure Granger causes to that of India, the opposite is not supported by the data. It is worth noting that our results may be sensitive to the sample period used and/or data measurement issues. However, the evidence in favor of nonlinear adjustment should not be neglected as many attempts using linear specifications did not provide better results than the one presented here.

4. CONCLUSION Various aspects of arms race between India and Pakistan have been empirically examined in a number of papers. However, researchers have not reached an agreement regarding the direction of the causality, and their empirical findings vary depending on the time period covered and the methodology employed. It is claimed in many studies that modeling approach, data, and data transformations may be the reasons for conflicting results. This paper argues that the mixed results of earlier literature could also be due to adherence to linear specifications. There is now a growing literature both theoretically and empirically arguing that relationships between the economic variables may not be symmetric and therefore nonlinear models should be considered. Following this literature, this paper aimed to investigate a possible threshold cointegration relationship between the military expenditures of India and Pakistan. Specifically, TAR and M-TAR type cointegration models are employed to investigate the possibility of asymmetric adjustment toward long-run equilibrium. Empirical findings justify the existence of an

Evidence of Asymmetric Cointegration

55

asymmetric cointegration of M-TAR class between the variables. Moreover, empirical evidence indicates that Indian military expenditure adjusts to discrepancies from the long-run equilibrium, whereas Pakistan military expenditure does not. Additionally, it seems that although Pakistan military expenditure Granger causes to Indian military expenditure, the opposite hypothesis is not verified as long as the results of the current paper concerned. These results are important in showing that the conflicting results of earlier literature may be due, among others, to the neglection of nonlinear specifications. It is also worth noting that the results presented here may also be sensitive to data, data measurement, and sample period covered. However, they indicate that nonlinear models should not be overlooked when analyzing the relationship between the variables related to military expenditure data.

NOTES 1. See also Smith, Dunne, and Eftychia (2000a) for a critical evaluation of statistical models used in applied defense literature, Lebovic (1999) for problems regarding military spending data. 2. If needed, a deterministic component such as time trend can be included in this regression. 3. Augmented Dickey–Fuller test indicates that both variables are integrated of order 1. 4. Dummy variables are needed to handle the outliers at 1963, 1964, 1965, and 1972. 5. We also estimated models with two and three lagged changes but found no evidence of long-run relationship. 6. See also Hansen (1996, 1997, 1999) for discussions of this issue.

REFERENCES Alexander, D. L. (1987). Security profile: India vs. Pakistan. Harvard International Review, 9, 39–41. Brauer, J. (2002). Survey and review of the defence economics literature on Greece and Turkey: What have we learned? Defence and Peace Economics, 13(2), 85–108. Chan, K. S. (1993). Consistency and limiting distribution of the least squares estimator of a threshold autoregressive model. The Annals of Statistics, 21, 520–533. Deger, S., & Sen, S. (1990). Military security and the economy: Defence expenditure in India and Pakistan. In: K. Hartley & T. Sandler (Eds), The economics of defence spending. London: Routledge.

56

NADIR O¨CAL AND JULIDE YILDIRIM

Dunne, P., Nikolaidou, E., & Smith, R. (2003). Arms race models and econometric applications. In: P. Levine & R. Smith (Eds), The arms trade, security and conflict (pp. 178–187). London, UK: Routledge. Dunne, P., Nikolaidou, E., & Smith, R. (2005). Is there an arms race between Greece and Turkey? Peace Economics, Peace Science and Public Policy, 11(2), 1–35. Dunne, P., & Smith, R. (2007). The econometrics of military arms race. In: K. Hartley & T. Sandler (Eds), Handbook of defence economics (Vol. 2, pp. 913–940). Amsterdam, The Netherlands: Elsevier B. V. Enders, W., & Granger, C. W. J. (1998). Unit root tests and asymmetric adjustment with an example using the term structure of interest rates. Journal of Business and Economic Statistics, 16, 304–311. Enders, W., & Siklos, P. (2001). Cointegration and threshold adjustment. Journal of Business and Economic Statistics, 19, 166–176. Engle, R. F., & Granger, C. W. J. (1987). Cointegration and error correction: Representation, estimation and testing. Econometrics, 55, 251–276. Ganguly, Sˇ. (1995). Wars without end: The Indo Pakistani conflict. Annals, AAPSS, 541, 167–178. Hansen, B. (1996). Inference when a nuisance parameter is not identified under the null hypothesis. Econometrica, 64, 413–430. Hansen, B. (1997). Inference in TAR models. Studies in Nonlinear Dynamics and Econometrics, 1, 119–131. Hansen, B. (1999). Testing for linearity. Journal of Economic Surveys, 13(5), 551–576. Lebovic, J. H. (1999). Using the military spending data: The complexity of simple inference. Journal of Peace Research, 35(6), 681–697. O¨cal, N. (2002). Asymmetric effects of military expenditure between Turkey and Greece. Defence and Peace Economics, 13(5), 405–416. O¨cal, N. (2003). Are the military expenditures of India and Pakistan external determinants for each other: An empirical investigation. Defence and Peace Economics, 14(2), 141–149. Oren, I. (1994). The Indo-Pakistani arms competition: A deductive and statistical analysis. Journal of Conflict Resolution, 38(2), 185–214. Refenes, A. N., Kollias, C., & Zapranis, A. (1995). External security determinants of Greek military expenditure: An empirical investigation using neural network. Defence and Peace Economics, 6(1), 27–41. Smith, R., Dunne, P., & Eftychia, N. (2000a). The econometrics of arms races. Defence and Peace Economics, 11(1), 31–43. Smith, R., Sola, M., & Spagnolo, F. (2000b). The Prisoners’ Dilemma and regime switching in the Greek-Turkish arms race. Journal of Peace Research, 37(6), 737–750. Tibbett, J. S., & Akram-Lodhi, A. H. (1997). Militarization and maldevelopment: The IndiaPakistan arms race. Scandinavian Journal of Development Alternatives and Area Studies, 16, 157–182. Yildirim, J., & O¨cal, N. (2006). Arms race and economic growth: The case of India and Pakistan. Defence and Peace Economics, 17(1), 37–45.

LIBERALISATION, DEMOCRATISATION AND THE DISTRIBUTION OF URBAN LOCAL PUBLIC GOODS Partha Gangopadhyay 1. INTRODUCTION An important issue in the study of economic development is that it examines how participatory democracy influences the efficiency and the equity associated with the utilisation of economic resources. The main research agenda in this context pivots on the question of whether and to what extent democratisation helps to allocate economic resources by serving the interests of the majority of voters. It is widely recognised that democratisation can promote the welfare of the majority by enhancing flows of information between citizens and policy makers and by increasing the accountability of policy makers to citizen voters. On the other hand, it has been widely held that democratisation can adversely affect the welfare of the majority by triggering and increasing unproductive rent-seeking activities in a democracy. Early empirical evidence on the welfare effects of democracy and democratisation have been primarily at the cross-national level and have focused on GNP growth as the outcome of interest (Barro, 1996; Minier, 1998). The results have been ambiguous, and riddled with a myriad of problems with regard to interpretation of national-level data. It also offered Conflict and Peace in South Asia Contributions to Conflict Management, Peace Economics and Development, Volume 5, 57–72 Copyright r 2008 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1572-8323/doi:10.1016/S1572-8323(08)05005-4

57

58

PARTHA GANGOPADHYAY

little explanation of the mechanisms by which democratisation affects the policy choices that, in turn, impinge on economic performance. It is also widely believed that the capture of public policies by interest groups can thwart the efficacy and the equity of the allocation of resources. In order to bypass the above weaknesses, the current research in this context focuses on the study of the efficacy of distribution of local public goods (LPGs) predominantly in a rural setup. An important issue now concerns the distribution of LPGs that impinge on the quality of living standards of millions of citizens in developing nations. Given the recent fads of fiscal and political decentralisation in many developing countries, withincountry variation can shed useful information to complement macro-level studies of the effects of democratisation. An important research agenda in this context has emerged as the following: the question of how and whether this process of decentralisation is welfare enhancing (e.g. Bardhan & Mookherjee, 2000, 2005, 2006a, 2006b; Besley & Coate, 2003). Quite often than not, India provides a facile case study for examining the economic consequences of democratisation due to the prominence of interest groups with different levels of resources and distinct group interests – the rich and the poor. Most of the work considered the distribution of LPGs in rural settings in India while the main concern of our work is the urban landscape of India. In the context of urban politics, the distinction between those who are poor and who are not is critically important (see Gangopadhyay & Nath, 2001a, 2001b) for distributing urban local goods: the rich and the poor as reported in Gangopadhyay and Nath (2001a, 2001b) differentially value the benefits of allocations of LPGs. As a result, different income classes in urban areas can have distinctly different interests that can, in turn, impinge on the allocation of LPGs. The main concern of this chapter is to consider the provision of LPGs and to understand the role of democratisation on LPGs in urban areas of India, as opposed to the rural setup studied extensively. There are two critical changes that have exerted a profound influence on LPGs in urban areas: first and foremost, only a generation ago large cities filled the urban landscapes of advanced industrial nations. Today developing nations are a home of many of the world’s largest cities (Krugman & Elizondo, 1996). To many observers, such an urban sprawl in developing nations, especially in India, is a sheer economic disaster as Bairoch (1988) poignantly labelled such mega-cities as ‘Romes without empires’. Such cities are often a home ground for poverty, destitution and deprivation. Second, the introduction of liberalisation of economic policies in India in the 1980s unleashed a wave of democratisation and policy revisions, which profoundly influenced the urban sector and the distribution of LPGs in urban areas.

Urban Local Public Goods

59

The main concern of the chapter is to evaluate the impact of democratisation on the LPGs of the urban areas in the early era of liberalisation and democratisation in India. It is important to bear in mind that the current research is propelled by two important questions concerning representative democracy, which have recently attracted serious attention from economists: first and foremost, how can opportunistic politicians be induced to act in the interests of citizen voters? Second, how to resolve, or at least mitigate, conflicts of interests among different groups of citizen voters in a democracy? It is only recently these questions received adequate attention (see Persson, Roland, & Tabellani, 2000) in a Western style democracy. It is, therefore, a modest attempt to provide a model and evidence pertaining to democratisation and distribution of LPGs in an urban setting of a developing nation. Towards this end, let us choose the late-1980s as the period of our investigation. The information on voters’ preferences for urban LPGs from different income classes in the three major Indian metropolitan cities has been collected on the basis of surveys undertaken in 1987–1988. From the domain of public information, we collect the data on the allocation of urban LPGs in Indian metropolitan cities. In order to understand the impact of democratisation, we undertake an empirical study of the impact of voters’ preferences on the allocation of urban LPGs in India in the relevant time period. The plan of the paper is the following: Section 2 offers a brief survey of the measures of economic liberalisation undertaken in the mid-1980s. Section 3 presents a summary of theoretical issues in the context of LPGs relevant for India. Section 4 discusses the political equilibrium in the distribution of LPGs in an Indian metropolis. Section 5 presents the experiment undertaken in three metropolitan cities to extract the preferences of citizen voters. Based on the experiment and secondary data, we document the impact of democratisation on the distribution, or allocation, of LPGs in these metropolitan cities of India. The chapter concludes in Section 6.

2. TRANSITION FROM THE ERA OF CONTROL TO THE NEW MINDSET OF ECONOMIC LIBERALISATION IN INDIA 2.1. Regulation and Industrialisation (1945–1984) Long before independence, the Government India Act of 1935 stressed the need for a guiding-hand in industrialisation as an integral component of socio-economic engineering in India. The Statement of Industrial Policy of

60

PARTHA GANGOPADHYAY

1945 (SIP 1945 hereafter) clearly laid down the foundation of industrial policy. The SIP of 1945 identified 20 key sectors for strict government control and also provided the rationale behind control and regulation.1 The Industrial Policy Resolution (IPR hereafter) of 1948 was adopted by the Parliament of Independent India as the first official policy of industrialisation. The crucial policy decision was to divide industries into three categories. First, 9 industries were reserved for exclusive government control. Second, the government also identified 18 industries that came under government regulation. Third, private enterprises were allowed in the non-designated areas. In order to implement the policy initiatives of the IPR of 1948, the government introduced the Industries (Development and Regulations) Act in 1951, which stipulated the following important measures:  First, no new industrial units could be established nor substantial expansion of existing plants could be made without a license from the central government.  The government could instruct industries that were deemed to be inefficient.  The government could take over industries that failed to comply with the instructions. In order to gain complete control over industrial development, the central government set up the Directorate General of Technical Development (DGTD) that was supposed to appraise the ‘techno-economic’ aspects of an application according to six criteria laid down. An enterprise for operation needed an acceptance authorised by the DGTD. The DGTD thus became a stumbling block to private enterprises as the licensing procedure had been complicated and lengthy. The IPR of 1956 further expanded government control and forged a labyrinth of government control and regulation over most of the industries. The major long-run objective of industrial development was to achieve self-reliance through import substitution. Therefore, elaborate restrictions on imports were introduced in the Import Trade Control Order of 1955. This Order introduced import licenses and thus placed quantitative restrictions on imports. During the 1950s and 1960s as the pace of industrialisation increased, the central government showed great concern about economic concentration in Indian industries (see Mahalanobis, 1955). Two types of concentration came under scrutiny: product-wise and wealth-wise concentrations. The Mahalanobis Committee (1964) was set up to address these problems. This committee unravelled a small number of groups who enjoyed massive command over the market

Urban Local Public Goods

61

and who had amassed disproportionately large wealth. This led to the enactment of the Monopoly and Restrictive Trade Practices Act (MRTP hereafter) in 1969 to gain greater control over large private enterprises. The objectives of the MRTP Act were:  To control concentrations of economic power detrimental to public interest.  To control practices of dominant enterprises.  To control restrictive trading arrangements between dominant firms. The MRTP Act of 1969 along with the revised Industrial Licensing Policy of 1970 finalised the administrative and legal manoeuvrings in India to bring the private enterprises under the control of the central government. The Foreign Exchange and Regulation Act (FERA) of 1973 introduced strict control over dealings in foreign exchange and foreign investment. The visible hand of government in industrialisation came under increasing criticisms in the early 1980s, which paved the way for the New Economic Policy that initiated the era of liberalisation in India. We will discuss the New Economic Policy of 1985–1986 in the next sub-section. Before that, it is important to note that the central government during the 1970s made some attempts to reduce the complexities of the licensing policy. In 1975, engineering industries were allowed to expand their capacity at a rate of 5% pa without a need for licenses. In 1978, quantitative restrictions on imports were partially replaced by tariff restrictions. The cement industry was partially deregulated through a weakening of regulations in pricing and distribution. The SIP of 1980 under Indira Gandhi’s government initiated the first bout weakening control over the MRTP and FERA companies (Government of India, 1980). The SIP of 1980 unequivocally stressed the importance of private enterprises in industrial development. The acceptance of a large IMF fund also accelerated Indian liberalisation due to increased IMF leverage. Indira Gandhi’s government declared the year 1982 as ‘productivity year’ and readily endorsed capacities, for a number of industries, created beyond the levels that had been previously authorized by the DGTD. Measures were taken to reduce control over cement and fertiliser industries. For the first time, non-resident Indians were allowed special facilities to invest their capital in home markets. All these changes snow-balled into the New Economic Policy of 1985–1986, which finally set the momentum for liberalisation that has gone unabated for more than a decade.

62

PARTHA GANGOPADHYAY

2.2. Deregulation and New Economic Policy (1985–1986) The major thrust of the New Economic Policy, 1985–1986, has been on the liberalisation of Indian industries (see Dutta, 1985, 1992). The liberalisation embodied a shift in industrial policy from that of regulation and development to that of planned deregulation (see Chakravarty, 1988; Marathe, 1986). The act of decontrol at the initial stage comprised of a set of four immediate measures to depart from the control regime: 1. Special facilities for diversification were accorded to selected industries. 2. The automatic registration with the DGTD of industries with fixed assets less than a well-defined ceiling and with foreign exchange requirements below a specific limit was allowed. 3. The access of large industrial houses to the production of specific items, provided these items are not in the category reserved for the small scale sector was allowed. 4. Additional capacities in excess of registered capacities of large industrial houses were allowed, on the condition that they undertake a particular export obligation.

3. THEORETICAL UNDERPINNING FOR LOCAL PUBLIC GOODS IN INDIA The decentralisation theorem of Oates (1972) suggests that local governments in advanced nations are effective in balancing the preferences and cost and, thereby, achieve a mix of local goods that efficiently satisfies the local demand. However, such an effective allocation may be blocked by interest group influence (see Borge & Rattso, 1993; Borge, Rattsø, & Sørensen, 1995) that may lead to inefficiency and deprivation even in advanced nations. It is quite likely that the battlefield of conflicting interests of urban settlers in developing nations would also block an efficient allocation. The median voter model posits that local goods are supplied through a majority rule voting process. As a result, the supply response of a local government coincides with the preferences of the median voter (see Rubinfeld, 1987; Bowen, 1943; Downs, 1957). Such a notion is inconsistent with a local government that provides many local goods and is influenced by powerful political parties (see Borge et al., 1995, p. 137). In such a scenario different groups of voters struggle to enforce their influences on local

Urban Local Public Goods

63

government (see Craig & Inman, 1985; Renaud & van Winden, 1991). The paradigm of direct democracy may have some limitations in explaining the supply responses by local governments even in advanced industrial nations. Such a paradigm has limited credibility in developing nations. In the context of advanced industrial nations, the Tiebout (1956) hypothesis provides the theoretical underpinning of efficient local expenditure. This hypothesis invokes the invisible hand principle to solve the public goods problem as posed by Samuelson (1954). The precise import of the hypothesis relies on the competitive market fable: profit-maximising local governments offering tax-local goods package come into economic contact with utilitymaximising residents who vote with their feet. This interaction engenders the forces of equilibration that effectively guide allocation of resources towards a Pareto-efficient outcome if local governments maximise their land values (see Henderson, 1985). Despite serious criticisms by Bewley (1981), the Tiebout hypothesis remains a challenging reference for advanced nations. In developing nations the lack of mobility of residents causes market failure as the residents rarely vote with their feet. As a result, the Tiebout hypothesis has been less tenable in developing nations. Following Breton (1974), one may argue that the lack of mobility of residents will result in a disequilibrium in the provision of local goods in developing nations. Due to the absence of complete markets and the lack of mobility of residents, such disequilibrium cannot be corrected by the gale of market forces. The disequilibrium results in a utility loss to residents that Breton chose to call degree of coercion/frustration. Residents in such societies invest in costly lobbying to reduce the degree of coercion. This influence of interest groups thus lessens the tenability of the decentralisation theorem of Oates (1972) in developing nations. The costly lobbying and the influence of interest groups engender an electoral equilibrium. We examine such an equilibrium in Section 4.

4. MODEL OF URBAN LOCAL PUBLIC GOODS: PRE-ELECTION OFFERS AND ELECTORAL EQUILIBRIUM The proposed model utilises the preferences of median voters from different income groups in a game theoretic framework to determine the optimal mix of local goods. Median voter representatives take the maximum value of available resources (tax and grants) as given. Thus, the exercise boils down

64

PARTHA GANGOPADHYAY

to optimising local expenditure mix subject to the budget constraint. The residents of a constituency elect their representatives on the basis of majority voting. We loosely stratify the residents into three income classes/groups, namely, the rich (A), the middle-income class (B), and the poor (C) by using certain income norms, which are discussed in the statistical outline. The representatives put forward a set of offers of tax-service packages wherefrom the electoral equilibrium emerges. In this section, we concentrate on the basic model that explains the electoral equilibrium. We apply the probabilistic voting theorem to explain the electoral equilibrium (see Wittman, 1989; Gangopadhyay & Nath, 2001a, 2001b, 2006). It is assumed that within each group residents have identical utility function from the local services. Suppose the utility functions of the three groups are UA(G), UB(G) and UC(G) respectively, and the variable ‘G’ labels the package of local services, or LPGs. The terms SA, SB and SC are the sensitivity parameters; they represent, for instance, the extent to which Group A decreases its vote for a political party in response to a divergence between its offer and Group A’s preferred allocation. From this basic premise we write the votes-to-offers function: vA ¼ 50  N A SA ½U A ðG  aÞ

(1a)

vB ¼ 50  N B SB ½U B ðG  bÞ

(1b)

vC ¼ 50  N C S B ½U C ðG  cÞ

(1c)

where a, b and c are, respectively, the ideal points of Group A, Group B and Group C (see the definition below), and N denotes the Group size. The intuition is that votes in each group are split evenly between two parties when the offers are the same. Otherwise a party loses votes as its offer deviates from the ideal points. The electoral equilibrium is defined by the condition (see Wittman, 1989): N A SA U 0A ðGnA  aÞ ¼ N B S B U 0B ðGnB  bÞ ¼ N C SC U 0C ðGnC  cÞ

ð1dÞ

where Uu represents marginal utility. In the electoral equilibrium, the higher the sensitivity times group size; the lower is the divergence between offer and ideal point, and hence the greater is the utility of the group from the electoral equilibrium. Statement 1. It follows that in an electoral equilibrium as defined above, the winning platform makes offer GnA , GnB and GnC and the percentages vA,

65

Urban Local Public Goods

vB and vC from Group A, Group B and Group C, respectively, vote for the winning platform. Thus, the winning platform is a coalition of members from Group A, Group B and Group C.

5. EMPIRICAL FINDINGS 5.1. Main Variables and Data Sources In an attempt to examine the question of deprivation in three Indian megacities, both secondary as well as primary data are used. Secondary data on local government expenditure on different services were collected for the years 1980–1988 from the Government of India (1980–1988), the Government of West Bengal (1986) and the World Bank (1985) (Table 1). Primary data were collected through a series of sample surveys conducted in Calcutta (Kolkata), Delhi and Bombay (Mumbai) in 1987–1988 through the National Institute of Public Finance and Policy, New Delhi (see Gangopadhyay & Nath, 2001a, 2001b for details). The sample surveys attempted to capture the preferences of the residents of these cities over a number of municipal services, or LPGs. We chose five basic services, namely water supply (1), streetlight (2), medical and public health and education (3), roads and buildings (4) and maintenance (5). We asked the interviewed subjects to express their preferences over the five services/LPGs according to the following rules:2 Rule 1. Every individual is assigned a total of a hundred votes, which he allocates among the five services. Table 1. City Bombay

Calcutta

Delhi

Secondary Data Sources for Urban LPGs in India. Sources of Secondary Data

Urban Public Finances in Developing Countries: A Case Study of Metropolitan Bombay. Urban Regional Report Number 76–113. The World Bank (1976–1986). Report of the West Bengal Municipal Finance Commission. Government of West Bengal. Department of Local Government and Urban Development (1976–1986). Reports of the Registrar General of India (1976–1986).

Other secondary sources A Study of the Resources of the Municipal Body (1983), NCAER Publication. Report of Zakaria Committee on Urban Local Finances. Government of India (1977–1978).

66

PARTHA GANGOPADHYAY

Rule 2. The stronger the preference for a service, the higher the votes one assigns to the service. Rule 3. Maximum vote assigned to a service is a hundred. Rule 4. Minimum vote is zero for a service. Rule 5. The vote difference should reflect the intensity of preferences over services. We ask the subjects to state their current preferences (1987–1988). Each sample in a city comprises 300 individuals proportionately representing 3 income classes, namely rich, middle-income and poor. On the basis of the rule of thumb and after conferring with the municipal committee members, we arrived at the following income categories (Tables 2 and 3). The survey data furnish us with the ideal points (Ii(max)) of three income groups. These data are presented in Table 4. Table 2.

Classification of Voters/Citizens on the Basis of Monthly per Capita Income.

Income Groups

Rich Middle Poor

Cities Bombay

Calcutta

Delhi

1,500þ 800–1,400 o800

1,000þ 700–900 o700

1,200þ 800–1,100 o800

Source: Computed. See Gangopadhyay and Nath (2001a,b) for the details and methodology.  The income is expressed in terms of the Indian currency ‘rupee’ for the year 1987–1988.

Table 3.

Minimum Per Capita Expenditure Norm (oi) for LPGs.

Water supply Streetlight Medical, Pub Health and Education Roads and Buildings Maintenance

oi in Nominal Term (Rs)a

oi in Percentage Term (%)

7.27 5.10 27.06 13.13 59.65

6 4.55 24.11 11.7 53.15

Source: Computed. See Gangopadhyay and Nath (2001a,b) for the details and methodology. a Indian currency (Rupees (Rs)).

67

Urban Local Public Goods Table 4.

Survey Results on Preferences of Citizens/Voters for LPGs in 1986–1987.

City

ai

Ii(max) Poor

Ii(max) Middle

Ii(max) Rich

Bombay (Mumbai) Water supply Streetlight Medical, Pub Health and Education Roads and Buildings Maintenance

14 20 14 14 38

32 10 25 17 16

16 17 25 24 18

21.5 15 16 21 16.5

Calcutta (Kolkata) Water Supply Streetlight Medical, Pub Health and Education Roads and Buildings Maintenance

30 7 10 16 38

20 18 26 22 14

28 14 27 16 15

18 16 22 21 23

Delhi Water Supply Streetlight Medical, Pub Health and Education Roads and Buildings Maintenance

16 6 23 20 35

29 18 23 18 12

21 16 20 23 20

26 15 21 25 14

Source: Computed. See Gangopadhyay and Nath (2001a,b) for the details and methodology.

The variable Y represents the actual provisions in percentage terms. The per capita expenditure on the LPG/service i is labelled as ai. The per capita expenditure norm on the LPGs/services is set by the Zakaria Committee Report (1978). We label the norm on service/LPG i as oi. The following tables, respectively, provide the observations on oi and ai (Table 5). From each city, 600 people were chosen as the representatives of 3 distinct income classes. We made a broad classification of the residents as the rich, middle-income and poor. We provide the basis of classification in Table 2. We made 25 sub-classes within each income class based on the subjects’ per capita income. We define the following variables as: Variable X1: This variable represents the individual preference in terms of the votes over ith service. Variable X2: This variable represents the per capita income of different income classes. This also includes the sub-classes. Variable X3: This variable represents the resources internally mobilised by the local government, which indicates the bargaining strengths of political agents.

68

PARTHA GANGOPADHYAY Table 5.

Per Capita Expenditure on the Local Public Goods in 1976–1977.

City

Per Capita Expenditure (ai) (Rs)

Calcutta (Kolkata) Water Supply Lighting Public Health and Medical Roads and Buildings Maintenance

16.06 3.8 5.54 2.41 44.3

Bombay (Mumbai) Water Supply Lighting Public Health Roads and Buildings Maintenance

20 3.67 24 10 44.3

New Delhi Water Supply Lighting Public Health Roads and Buildings Maintenance

4 3.37 19.76 7.9 40

Source: Computed. See Gangopadhyay and Nath (2001a,b) for the details and methodology.  Calculated at 1976–1977 prices.

Variable X4: This variable captures the equilibration mechanism, which brings the actual allocation (ai) close to the socially desired one (oi). We measure the shortfall/divergence as Si such that: oi  ai Si ¼  100 (2a) oi This shortfall affects the welfare of the residents who then subsequently attempt to rectify the situation by the collective voice. We measure the loss of individual welfare as the following: X 4 ¼ SX 1

(2b)

where S is the vector (s1, s2, s3, s4, s5) encompassing the five LPGs/local services. We collect secondary data on Si for the year 1976–1977 and allow a decade for the equilibration towards the socially desired state (oi). Variable M: This is a dummy to capture the democratic nature of the local government. If local elections are regular then M ¼ 1, otherwise M ¼ 0.

69

Urban Local Public Goods

5.2. Regression Results: Can Voters Influence the Distribution of Urban LPGs? The postulated relations are captured in the following equation: a1 Y 1 þ a2 X 1 þ a3 X 2 þ a4 X 3 þ a5 X 4 þ a6 M ¼ 0

(2c)

Since the actual provisions and individual preferences and hence induced preferences of political agents feed on each other, one cannot directly postulate that Y1 is the independent variable and X1 is the dependent variable. There is a simultaneity bias in it. As a result, we adopt a two-stage least square estimation of the above equation. X2, X3 and X4 are treated as instrumental variables, which are exogenously determined. Y1 and X1 are the endogenous variables. The two-stage least square results are contained in the following table (Table 6). The results show that the actual provisions are significantly affected by the preferences of different income classes. The equilibration mechanism, X4, also has a statistically significant impact on Y1. The sensitivity of Y1 to the changes of X1 and X4 is also quite high. Hence the results lend support to the theoretical postulate that in the proposed institutional setup representing a collective ‘voice’ of residents, individual preferences of citizens play a significant role in determining an equilibrium provision of urban local goods in the three metropolitan cities of India. Table 6.

The Regression Result.

Two stage least square results Regressors X1 X2 X3 X4 R2 ¼ 0.92 Rn2 ¼ 0:96 RSS ¼ 10481.4 S.Dos ¼ 3.12 DW ¼ 1.77 Source: Computed.

Coefficients

Standard error

T ratio

þ2.25 0.0038 0.00004 þ1.1713

0.5602 0.0068784 0.00000043 0.4171

þ4.0257 0.5548 1.1263 þ2.8060

F statistic (3.41) ¼ none SE of regression ¼ 15.9889 Mean of Y1 ¼ 21.93 Value of IV(min) ¼ 18.0337 Sargan Test Chi2 (5 and 11) ¼ 0.0705

70

PARTHA GANGOPADHYAY

6. CONCLUSION The broad purpose of this research has been to provide empirical evidence to elucidate theories of democratisation in developing nations, with a particular focus on the distributional consequences of these democratic processes. Our theoretical analysis is rooted in a model of representative democracy embedded in a voting model describing an urban economy that highlights (income) class interests and the distribution of LPGs that are allocated by elected local governments. Our evidence suggests that the role of representative democracy has been extremely significant in the distribution of urban LPGs even in the early days of economic liberalisation in India in 1980s. There is enough evidence also to argue that the introduction of economic liberalisation in India was founded on a strong representative democracy in urban political jurisdictions in allocating crucial LPGs. Urban local governments in India provide significant proportions of LPGs that, in turn, influence the quality of life for 500 million people in the urban sector. The main goal of this chapter is to examine the effect of democracy on the distribution of LPGs in three mega-cities of India. From sample surveys and the secondary data, we derive an empirical finding that confirms the role of democratisation in determining the LPGs in the urban sector of India as early as the 1980s. In developing nations, as in advanced nations, political and institutional factors along with special interest groups typically influence the provision of LPGs. In the context of the formation of dominant coalitions, different groups engage in lobbying for influence (Craig & Inman, 1985; Renaud & van Winden, 1991) that is expected to reduce the influence of citizen voters on the final distribution of LPGs. In this work, we introduce income groups as contestants for influencing the allocation of LPGs in the urban sector of Indian polity. From the proposed model and from the empirical study, we find that there is significant statistical evidence to conclude that citizen voters – despite interest group politics and dominant coalitions – exerted significant influence on the distribution of LPGs in urban India in the 1980s. There is thus clear evidence that democracy and democratisation played an important role in determining the allocation of LPGs in urban India around the time when the principles of economic liberalisation started opening up the Indian economy to the forces of global competition in the late 1980s.

71

Urban Local Public Goods

NOTES 1. The rationale comprises of two ideas: a. The central government must have power and influence to direct the overall industrial development. b. Government must directly control some industries for the public interest. The 20 key industries to be under government control included iron and steel, automobiles, aircraft manufacturing and shipbuilding, electrical machinery, heavy machinery, heavy chemicals, cement, woolen textiles, nonferrous metals that became targets of active deregulation in 1985. 2. We made it clear to the subjects that their information would not affect the actual provisions, and hence we believe that the expressed information does not have any tactical misrepresentation.

REFERENCES Bairoch, P. (1988). Cities and economic development. Chicago: Chicago University Press. Bardhan, P., & Mookherjee, D. (2000, May). Capture and governance at local and national levels. American Economic Review, 90(2), 135–139. Bardhan, P., & Mookherjee, D. (2005). Decentralizing anti-poverty program delivery in developing countries. Journal of Public Economics, 89(4), 675–704. Bardhan, P., & Mookherjee, D. (2006a). Corruption and decentralization of infrastructure delivery in developing countries. Economic Journal, 116(508), 101–127. Bardhan, P., & Mookherjee, D. (2006b). Pro-poor targeting and accountability of local governments in West Bengal. Journal of Development Economics, 79, 303–327. Barro, R. J. (1996). Democracy and growth. Journal of Economic Growth, 1(1), 1–27. Besley, T., & Coate, S. (2003). Central versus local provision of public goods: A political economy analysis. Journal of Public Economics, 87(4), 2611–2637. Bewley, T. (1981). A critique of Tiebout’s theory of local public expenditure. Econometrica, 49(3), 713–734. Borge, L., & Rattso, J. (1993). The restructuring process in small and large municipalities: A dynamic model of local government priorities in Norway. Applied Economics, 25(5), 589–598. Borge, L., Rattsø, J., & Sørensen, R. (1995). Local government service production: The politics of allocative sluggishness. Public Choice, 82, 135–157. Bowen, H. R. (1943). The interpretation of voting in the allocation of resources. Quarterly Journal of Economics, 58, 27–48. Breton, A. (1974). The economic theory of representative government. Chicago: Aldine Publishing. Chakravarty, S. (1988). Development planning: The Indian experience. Delhi: Oxford Economic Press.

72

PARTHA GANGOPADHYAY

Craig, S., & Inman, R. P. (1985). Education, Welfare and the New Federalism: State Budgeting in a Federalist Public Economy. In: H. Rosen (Ed.), Studies in the state and local public finance (pp. 187–227). Chicago: Chicago University Press. Downs, A. (1957). An economic theory of democracy. New York: Harper & Row. Dutta, B. (1985). The central budget and new economic policy. Economic and Political Weekly, 20(16). Dutta, B. (1992). Indian planning at the crossroads. New Delhi: Sage. Gangopadhyay, P., & Nath, S. (2001a). A bargaining model of the median voter. Urban Studies, 38(13), 2379–2391. Gangopadhyay, P., & Nath, S. (2001b). Deprivation and incidence of urban public services. Review of Urban and Regional Development Studies, 13(3), 207–220. Gangopadhyay, P., & Nath, S. (2006). Urban crisis and globalization. In: H. Guven & M. N. Ghosh (Eds), Globalization and less developed countries (pp. 68–84). Palgrave, Chapter 4. Government of India. (1980). Statement on Industrial Policy (SIP). July, 23. Government of India. (1980–1988). Central statistical organisation. Annual Statistical Abstract. New Delhi. Government of West Bengal. (1986). West Bengal municipal finance commission report. Calcutta, India. Henderson, J. V. (1985). The Tiebout model: Bring back the entrepreneurs. Journal of Political Economy, 93(20), 248–264. Krugman, P., & Elizondo, R. L. (1996). Trade policy and the third world metropolis. Journal of Development Economics, 49, 137–150. Mahalanobis, P. C. (1964). Report of the committee on distribution of income and levels of living. Part I. Planning Commission of India. Mahalanobis, P. C. (1955). The approach of operational research to planning in India. Sankhya, 16. Parts 1 and 2. Marathe, S. S. (1986). Regulation and development: The Indian policy experience of controls over industry. New Delhi: Sage. Minier, J. A. (1998). Democracy and growth: Alternative approaches. Journal of Economic Growth, 3(3), 241–266. Oates, W. (1972). Fiscal federalism. New York: Harcourt Brace Javanovich. Persson, T., Roland, G., & Tabellani, G. (2000). Comparative politics and public finance. Journal of Political Economy, 108, 1121–1161. Renaud, P., & van Winden, F. (1991). Behaviour and budgetary autonomy of local governments: A multi-level model applied to the Netherlands. European Journal of Political Economy, 7, 547–577. Rubinfeld, D. (1987). The economics of local public sector. In: A. Auerbach & M. Feldstein (Eds), Handbook of Public Economics (pp. 571–645). Amsterdam: North-Holland. Samuelson, P. A. (1954). The pure theory of public expenditure. Review of Economics and Statistics, 36, 387–389. Tiebout, C. (1956). A pure theory of local expenditure. Journal of Political Economy, 64, 416–424. Wittman, D. (1989). Why do democracies produce efficient results? Journal of Political Economy, 97(6), 1395–1424. World Bank. (1985). Urban Public Finance in Developing Countries, A Case Study of Metropolitan Bombay. Urban Development Report No. 76–113, Bombay. Zakaria, P. (1978). The Zakaria committee report. New Delhi.

NATURAL DISASTERS: A NONMILITARY THREAT TO NATIONAL SECURITY Ajey Lele A majority of over 200 major conflicts that have taken place since the end of the Second World War are intrastate, arising out of problems of nation-state building. A cohesive nation-state is a result of people within the geographical boundaries accepting their allegiance to the state and superseding subsidiary loyalties such as language, religion, sect, or ethnicity and sharing a sense of common history and common aspirations about the future (Subrahmanyam, 1990). The process of nation-state building faces various challenges because almost every state carries the burden of its own unique problems. Fortunately, during the last five to six decades this evolutionary process has reached certain logical conclusions as witnessed in many parts of the world. This becomes evident from the fact that very few interstate conflicts have taken place during the recent past. Also, the growth of democracy, freedom of expression, and efforts toward peaceful coexistence in various parts of the world could be seen as pointers indicating reduction in military threats to civil society in general. The end of the cold war, rapid development toward liberalization in many parts of the world, and a series of confidence-building measures, undertaken between states, have reduced the possibilities of war comparatively.

Conflict and Peace in South Asia Contributions to Conflict Management, Peace Economics and Development, Volume 5, 73–85 Copyright r 2008 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1572-8323/doi:10.1016/S1572-8323(08)05006-6

73

74

AJEY LELE

However, no wrong conclusions should be drawn regarding the decline in conflict propensity. That conflict still remains a major impediment toward achieving long-term peace may be a rationale, for its basis has changed to a degree. It could be argued that during the last few years in many parts of the world human security has been challenged more often than national security. The root cause of recent violence and tension in international systems is arising mainly out of the inability and unwillingness to adjust to challenges posed by changes in political and social consciousness and perspectives (Subrahmanyam, 1993). This global challenge posed to human security appears to be arising more from nonmilitary threats than military threats. The nonmilitary threats could be defined as those activities in which nonmilitary means are predominantly employed that threaten the security of the nation-state. General nonmilitary threats include emergencies other than armed conflict such as terrorist activities, illegal weapons transfer, uncontrolled migration or massive refugee flow, religious or ethnic extremism and rivalries, international organized crime, social unrest, and a number of other activities that may lead to armed conflict if unresolved. Nonmilitary threats such as religious extremism, drug trafficking, money laundering, and terrorism exacerbate the situation. Poverty and shortages of food and energy threaten the stability of societies and new nation-states. Unchecked population growth and the debilitating effects of communicable diseases such as AIDS and TB are factors of concern (Brajesh, 2001). Generally, it has been observed that the current threats to global security arise largely from nonmilitary causes: cross-border movements of populations; ethnopolitical, socio-economic, and communal-religious politics; terrorism with its seminal linkages to money-laundering operations and drug and arms smuggling; environmental degradation, spawning related problems of deforestation and desertification; internal migration; and chaotic urbanization (Chari). Even though these different types of threats are generally clubbed together as ‘‘nonmilitary threats,’’ each of them has potentially important divergences in its impact on political, societal, and military dimensions of the state. This paper attempts to identify the significance of one such nonmilitary threat to the nation’s security called natural disaster. The paper is organized into four sections. The first section ‘‘Context’’ puts the threat in context by widening the scope of the debate on nonmilitary threats by adding natural disaster as a separate category. Then a discussion is carried out on the social and political consequences of a few recent natural disasters and the nature of the threat these disasters have posed to state security (see section Natural Disasters). The third section ‘‘Disaster Scenarios’’ undertakes scenario writing as an attempt to provide an

Nonmilitary Threat to National Security

75

alternative vision for the future that could be useful to comprehend events that seem to contain a blend of unrelated information. The last segment attempts to put forth a few points of convergence and divergence that could prove useful in predicting how communities might react when faced with the threats and dangers of natural disasters.

CONTEXT Historians have interpreted the record of human struggle for survival in different ways, varying from a pessimistic to a cautiously optimistic approach. But there is no doubt that human destiny is shaped by the success or failure of human responses to challenges faced collectively as a society (Pendse). Historical records suggest that natural disasters, human violence, and war are common; humans and human groups are also quite capable of using violence and/or collaboration in the process of seeking resources, establishing status, and dominating other humans (Robert, Norwood, & Fullerton, 2004). The root of the most violent conflicts throughout history has been competition for territory and resources; such conflicts are likely to intensify as resources become scarce and the quality of the environment degrades further. Widespread environmental degradation has the potential to aggravate relations, behavior, and security. Environmental degradation may also be a cause of population movement, which in turn poses a threat to the environment. The ecological impact of large refugee movements has only recently received serious attention, but increasingly it is acknowledged that large influxes of people can have significant environmental implications for the receiving region. This cumulative causality is a characteristic feature of the link between the environment and security (see www.globalcentres. org/cgcp/english/html_documents/publications/security/eng/intro.html). Today, environmental problems constitute an important part of nonmilitary threat discourses. Also, changes in demographic patterns are being studied seriously. Water and food scarcity and refuge problems are the obvious fallouts of various nonmilitary threats. Anticipating risk and generating response to tackle such threats is possible because threat assessment to an extent can be carried out well in advance. However, it has been observed that states find it difficult to respond to the threats, which come unexpectedly and from unknown quarters. Terrorist attack, a nonmilitary threat to a nation’s security, is one such threat that states find difficult to anticipate well in advance. But particularly after 9/11, various studies have taken place to access the pattern of

76

AJEY LELE

terrorism, and the entire security discourse has revolved around this threat for the last 4–5years. In the present era, one threat demands focused attention because of the uncertainty associated with this threat, and that is, the threat from natural disasters. Few recent natural disasters and subsequent reactions by common people to these disasters show that there is a striking change in the ways in which citizens perceive and respond to sudden, urgent, destructive events and, more importantly, in citizen expectations of the government’s capacity to anticipate and respond to such events (see http://arjournals.annualreviews. org/doi/abs/10.1146/annurev.polisci.8.081404.075608). It appears that this age-old struggle for territory and resources is likely to take more serious turn if severe natural calamities occur frequently and states fail to handle them effectively. The natural disasters, which transgress national boundaries, are capable of endangering security of the states. In short, natural disasters pose a risk for inter- and intrastate conflicts. Such threats endanger our societies. Hence, there is a need to respond to such threats with flexible cooperative, coordinated, and multilateral responses. Such threats are multidimensional and demand multidimensional responses. Few manifestations of these threats already form a part of a nonmilitary threat debate. However, various other angles of such threats such as behavior of the suffering population and their likely involvement in lootings and killings, their likely transborder movement (in case the calamity takes place at the political border region of the two states), involvement of few NGOs and religious groups with the vested interests to provide relief at the cost of their own agenda, etc. do not form part of the current thinking on nonmilitary threats. Under this backdrop, it becomes essential to categorize this threat as a nonmilitary threat and hence demands separate attention. Also, the central idea of defining the natural disaster in terms of security is to help move it to the top of the priority list of political actors. Any classic response to uncertain threats such as, natural disasters need to recognize the limitations of the existing system and to broaden the scope of existing actors, agents, and knowledge that can be measured for action. From this point of view, a need exists to formulate a mechanism for anticipating risk and generating resilience in response to any natural disaster. Disaster management cells are functional in many states that mainly look after consequence management in following ways: 1. Mobilization of search and rescue operations 2. Provision of disaster assistance 3. Recovery and reconstruction of the damaged communities

Nonmilitary Threat to National Security

77

All the above functions are relevant in all cases of disasters; However, disasters of severe intensity demand additional measures of government action because of the dangers of simple disaster relief operation turning into a hostile conflict zone. Any failure in prompt and adequate (it is extremely difficult to understand what is adequate in case of a disaster and what are the aspirations of the sufferers from the government) institutional response to such risks and threats puts the conflict management capabilities of security institutions to further tests. It is not so much important how to enhance the mobilization of social and administrative support to a disaster affected area, for this can be expected to occur naturally on its own depending upon the situation and the nature of support the state gets from its own citizens and international community. The caveat is that there does need to be serious attention to the quality of distribution and timeliness of distribution of social resources. The more serious concern is how to prevent the deterioration of social support that evolves insidiously over time. Disaster victims, regardless of the disaster’s cause, need all tangible, informational, and emotional forms of social support. The real issue is how the society will react to the scarcity of resources; will they use violence as a medium to express their antagonism? Scarcity is not a product of ‘‘nature’’ but rather a consequence of control, ownership, property, sovereignty, and markets. Even properly functioning markets can foster mal-distribution and relative scarcity. Relative scarcity is also a condition of boundaries, in this instance political, cultural, or social ones. The resources must remain sovereign property. In other words, scarcity is a social construction that serves the commodification of nature (Lipschutz, 1997). Also, it becomes important to view disasters in a different perspective (beyond the humanitarian angle) that take place over a geographical region involving more than one state and regions where interstate or intrastate disputes already exist. Any physical expression of resentment against the system needs to be viewed more seriously over here. The strategic interests of key players over the region and their capacities for military intervention over the region need to be factored in immediately while starting the process of disaster management. It may become necessary to use military means to prevent the annihilation of the society further. Traditional security thinking focuses on the nation-state and is linked with ‘‘actor’’ related military or nonmilitary threats. In case of military threat, the actor could be the enemy-state, and in the case of nonmilitary threat the actor could be, say, the environment, water, terrorists, etc. Here in many cases, technical means are available (they may not be economically

78

AJEY LELE

viable) to tackle these threats at least partially; for example, water security may not be a big problem if cheap, effective desalination technology is available. However, the current level of technology is highly inadequate to tackle most of the severe natural disasters (e.g., experiments changing the direction of asteroids approaching the earth are still in a very nascent stage). Risk was ever present in a complex social world(Wildavsky, 1988 and see also http://arjournals.annualreviews.org/doi/abs/10.1146/annurev.polisci.8. 081404.075608), and it would be impossible for any government to eliminate risk altogether, particularly the risk from natural disasters. Extreme events are beyond human control and are not the products of inadequate planning, negligence, or uninformed actions that lead to occurrence of a few nonmilitary threats such as, environmental threats, terrorism, sectarian conflicts, etc. For natural disasters, the degree of risk varies under different conditions, and governments should design policies to reduce this risk and increase security for a price measured in economic or political terms. It should be noted that all policies and procedures, however, assume that the government itself remains intact and that citizens are the unintended victims of destructive events. In case of any major destruction affecting the government/governments itself, the question of security would become much more complicated.

NATURAL DISASTERS Nature’s fury always leaves its own marks behind, and if nature’s destructive force affects a state’s critical infrastructure then the state’s problems multiply exponentially. Critical infrastructure is defined as those physical facilities and those information technologies and communication networks, which – if destroyed, degraded, or rendered unavailable for an extended period – would impact the social or economic well-being of the nation or affect the state’s ability to conduct national defence and ensure national security (see http:// www.dcita.gov.au/tel/emergency_call_services,_telecommunications_privacy,_ law_enforcement_and_national_security/natural_disasters). Nation-states recognize that health, safety, and prosperity of the nation are dependent on security of its various critical infrastructure assets and hence make all efforts to secure them. Natural disasters are not new to human history. Major natural disasters have an unequal cycle of occurrence. Few disasters in the past have shown a cycle of reoccurrence that is sometimes a hundred years or even more. If disasters take place at sea, they have a potential to cause damage to critical

Nonmilitary Threat to National Security

79

infrastructure such as, oilrigs. If they take place over land where, say, some strategic assets such as nuclear installations are situated, they can cause real disorder in the system. However, like any classical terrorist attack natural disasters do not have any address for the target already written on them. Hence, on many occasions it becomes difficult to appreciate that what trail of destruction the natural disaster may leave. Nature has dealt staggering blows to the Earth and its people on few occasions during current and last century. These may not be the worst disasters ever, either in the power of the events or in the loss of life and property that they caused but have left a major impact on the affected state’s ascendancy. The costs of natural disasters – lives lost, homes destroyed, economies disrupted – have skyrocketed in this century, as the world’s population has grown and has moved onto areas that are vulnerable to earthquakes, hurricanes, landslides, and other natural hazards (see http://geography.about.com/library/misc/blcenturyworst.htm). Unfortunately, because of the existence of major critical infrastructure, the human population living over the disaster-prone fault lines, and few disasters not following the ‘‘human made’’ geographical borders, such disasters have unfolded the importance of redefining security. Interestingly, few interstate disasters have even given hope for finding solutions to the long-lasting problems between states. In view of the above, it would be of interest to do a macro analysis of few recent cases of natural disasters and their impact on the security apparatus of the concerned states. Cases selected here are very recent in origin, and hence it may not be possible to come out with specific conclusions because of the dynamic nature of the cases. The cases studied are the Asian Tsunami, the Mumbai flash floods, killer hurricane Katrina, and South Asian (Kashmir) Earthquake. The earthquake-induced tsunami disaster that struck countries around the Indian Ocean rim without warning on December 26, 2004 killed 300,000 people. The main impact was on Indonesia’s Aceh province (230,000 killed), Sri Lanka’s east and south coasts (more than 37,000), southeastern India, Andaman and Nicobar Islands (at least 17,000), and southern Thailand (at least 8,000, roughly half of whom were tourists). Fatalities were also reported from Myanmar, Malaysia, the Maldives, Seychelles, and the other side of the Indian Ocean in Somalia’s Puntland region, Tanzania, and Kenya (Huxley, 2005). Mumbai, the financial capital of India, faced one of its worst disasters in history on July 26, 2005 when parts of city almost received one meter of rainfall within 24 h. Heavy flooding was caused in parts of the city with 994 mm of rainfall. Intermittent rainfall continued on the next day also

80

AJEY LELE

causing major obstructions to relief operations. In some parts of city, cloudbursts were also reported that resulted in heavy rains, and in some localities, houses were submerged in 1–2 m of water. In some areas, the waters rose to a height of 5 m (15 ft) (see www.en.wikipedia.org/wiki/ 2005_Maharashtra_floods-42k). In Mumbai, 546 people died in the floods either by drowning or in landslides and other related hazards (see also http://cloudburstmumbai.blogspot.com/). Hurricane Katrina first made landfall as a Category 1 storm just north of Miami, Florida on August 25, 2005, then again on August 29 along the Central Gulf Coast near New Orleans, Louisiana, as a Category 4 storm. Its storm surge soon breached the levee system that protected New Orleans from Lake Pontchartrain. Most of the city was subsequently flooded by the lake’s waters. This and other major damage to the coastal regions of Louisiana, Mississippi, and Alabama made Katrina the most destructive and costliest natural disaster in the history of the United States. The official death toll stands at 1,281, the damage higher than $200 billion, and over a million people displaced because of flooding (see http://en.wikipedia.org/ wiki/Hurricane_Katrina). The Kashmir earthquake occurred on October 8, 2005, with the epicenter in the Pakistan administered region of Kashmir. It registered 7.6 on the moment magnitude scale, making it a major earthquake in the history of the region. As of October 31, the Pakistani government’s official death toll was 53,182 with reports of 1,360 deaths in the Indian administered region of Kashmir. Figures from the central government in Pakistan have been outstripped by estimates from regional officials placing the country’s death toll at 79,318. Most of the affected areas are in mountainous regions, and access is impeded by landslides that have blocked the roads. An estimated 3.3 million were left homeless in Pakistan. The UN reported that over 4 million people are directly affected. Many of them are at risk of dying from the spread of disease. It has been estimated that damages incurred are over 5 billion US dollars (see http://en.wikipedia.org/wiki/2005_Kashmir_earthquake). Amongst these four cases, two cases are interstate and two are intrastate. In intrastate cases such as, Katrina and the Mumbai floods, the damage was restricted to a limited geographical area. The interstate cases also have some differentiation among themselves. The Asian Tsunami had affected the coastal regions of a few states while the Kashmir earthquake took pace over a conflict zone between India and Pakistan. All these disasters have some similarities and some differences. It is not the purpose of this paper to look at these characteristics closely but to look at a larger picture, the backdrop of these disasters.

Nonmilitary Threat to National Security

81

It has been observed that the governments of affected countries and local insurgent movements (where applicable), as well as regional and extraregional powers engaged in relief efforts, have all sought political gain in the wake of a few of these disasters despite their undoubted humanitarian concerns. In the long run, the calamity may not alter political or strategic fundamentals significantly, but it has raised important questions about the meaning of security and the relative resources devoted to protecting populations against ‘‘traditional’’ security challenges (whether internal or external) on the one hand and threats to ‘‘human security’’ on the other (Huxley, 2005, p. 124). The disaster in Mumbai was on a relatively lower scale, and outside India interests involved were mainly from the Indian Diaspora. However, this disaster in many ways is a signal to the states that have such big and densely populated cities. The ratio of Mumbai’s open spaces to its population – at 0.03 acres per 1,000 citizens – is the lowest in the world. Naturally, in spite of the disaster being restricted to a limited area it affected the life of many because of the shear population density of the region. Generally, here the citizens paid with life and property for the greed of a coterie of politicians, bureaucrats, builders, and criminals who influence civic development and oversee environmental degradation to suit their vested interests (D’iima, 2005). But this reality existed before the disaster. What was important after the disaster was the human reaction to the natural calamities. Apart from stories of heroism, what mainly emerged was how desperation drives human beings to assume aggression. In Mumbai, the state/provincial government was caught napping, and disaster plan did not work appropriately. Public interest litigations were filed; inquiries conducted, and protest meetings were held. However, the situation limped back to normalcy maybe because the local population was more tolerant, maybe the aid in some form at least had reached the needy, or maybe the intensity of disaster was not large enough to drive them toward physical violence. A dramatically opposite situation was seen at New Orleans. First, the disaster was of much higher scale than that of Mumbai. Second, the geography of New Orleans and the damage caused to the levees (embankments) compounded the situation further. Third, half of the Mumbai stay in slum areas, and every monsoon they face the wrath of rains; this time the intensity was on much higher scale, but the broader point is that the population is mentally and physically tuned to survive in hardships, which was not the case with New Orleans.

82

AJEY LELE

Looters struck in New Orleans added to the city’s misery. They numbered in the thousands and carted away anything that was unguarded while a few even overwhelmed police officers (Indian Express, 2005). Performance of the state police force was also highly questionable. Some 250 police officers were facing disciplinary charges for leaving their posts without permission during the crisis. A few of them were also involved in the looting of items such as, jewelry (see http://www.news24.com/News24/World/Hurricane/0,,2-101942_1809026,00.html). In short, the situation of law and order had worsened to such an extent that even custodians of law were taking advantage of the situation. The disasters in Mumbai and New Orleans were intrastate disasters, and both influenced the lives of a limited population. However, both disasters showed shades (maybe of different intensity) of challenges such threats may pose to the overall security apparatus of the state. Asian tsunami and Asian earthquake have affected not only a huge population but also the regions that are facing violent and bloody conflicts over the years. These two disasters have shown how nature’s apathy toward a so-called human conflict sometimes makes it look irrelevant. These cases also show how states refuse to accept signals sent by nature and even try to politicize the natural disasters. At the same time, the global community does play a vital role in disaster relief. However, it is only natural that the states’ individual interests play a dominant role during such situations. The geographical scope of damage that the tsunami wrought combined with the fact that many of the casualties were tourists from developed countries ensured that the calamity received sustained media attention and further provoked an outpouring of concern and assistance from peoples and governments worldwide. In the case of the Kashmir earthquake, there was some reluctance from various agencies initially (states, NGOs, business houses); however, subsequently the Western nations (read USA) realized that it could be a nice opportunity to improve their image with Islamic states and hence the thrust on relief. In general, the relief effort in these calamities has highlighted key players’ strategic interests and their capacities for military intervention in the region (Huxley, 2005, p. 125). Every disaster may not provide a window of opportunity for states to intervene militarily or diplomatically. Essentially, the geographical location of the disaster area decides its strategic relevance. The tsunami affected many parts of the globe, but other than humanitarian assistance, the areas of strategic relevance were mainly two: Indonesia and Sri Lanka. In the case of the Kashmir earthquake, the major brunt of the disaster was experienced by the part of Kashmir that is occupied by Pakistan.

Nonmilitary Threat to National Security

83

The relief effort showcased the economic strength and, in varying degrees, the burgeoning military deployment capabilities of the United States, Japan, India, Australia, and Singapore. Again the ‘‘victim’’ countries (the countries facing the natural disaster calamities) are comfortable dealing with extraregional powers with which they have long established security links. However, they face difficulties accepting any sort of help from states with which they are facing security problems. This became evident when Indonesia had some discomfort over the large-scale presence of US and Australian troops over their territory. Similarly, after the earthquake Pakistan also was puzzled in respect to accepting help from India. Tsunami disaster is a massive challenge for the political, social, and humanitarian reconstruction for Indonesia and Sri Lanka. For the last many years, both these states are facing substantial challenges from insurgency. There is a 29-year dispute between Aceh’s separatist rebels and the Indonesian government that has seen many bloody conflicts (Jane’s Intelligence Review, 2005). The Gerakan Aceh Merdeka (GAM) group has been fighting with the Indonesian government for independence since 1976 (Schulze, 2003). In Sri Lanka, a permanent civil war of exceptional cruelty has been raging since 1983, especially in the north and east of the island (Alan, 1995; Narayan Swamy, 2002). Initially, there was hope that the tsunami would compel the two sides to set aside their differences and work in tandem to bring relief to those affected (Jane’s Intelligence Review, 2005). However, in the case of Sri Lanka particularly a disaster of this magnitude failed to bring peace between government and Liberation Tigers of Tamil Eelam (LTTE). This is because the LTTE was keen to avoid government support because it could have given the government a chance to project itself as a provider of human security. In the case of Indonesia, the government had previously kept Aceh closed to foreign aid workers and journalists, but it was unable to cope with devastation of this scale and therefore had to accept international humanitarian assistance. (Jane’s Intelligence Review, 2005) Consequently, the tsunami has injected some new life into negotiations between the government of Indonesia and GAM. There are indications that both the parties have learned much from the disaster and now are working toward a permanent peace in the region.

DISASTER SCENARIOS The problem of uncertainty is particularly acute in the efforts to forecast future natural disasters and strategies to deal with them. In situations of

84

AJEY LELE

deep uncertainty, standard methods of analysis based on known data fail, and under such circumstances methods such as scenario building are used. Scenario writing belongs to the family of qualitative methods of futuristic research. With the help of this method, it is possible to create scenarios describing a state or society or part of it at a defined moment in future history. Scenarios create new visions of possible futures’ alternatives and help in decision-making. It also gives a solid basis for evaluation of strategies and action programmes. This method is useful in terms of envisaging the implications of uncertainties. But scenarios should not be perceived as the only possible futures (see http://www.und.ac.za/und/ling/ archive/wade-02.html). No single scenario may be accurate entirely; probably a set of scenarios refined through review and discussion could represent a range of situations that could occur. The process should include participation from policy makers, professionals, and analysts. This method warrants careful consideration, as it is grounded in systematic, rigorous, and detailed analysis of the characteristics and interactions of various natural systems and human responses to it. It differs from traditional methods of forecasting but suffers from the inherent weakness that it cannot predict which of the potential scenarios is most likely to happen (Louise, 2005). Here scenario building is attempted not only from the point of view of predicting the future, but also for creating an occasion for structured thought and intelligible communication on disaster management in the Indian context. These scenarios could be viewed essentially as templates for detailed and methodical scenario building.

Scenario 1 Background There is little doubt that tropical cyclones pose a significant overall threat to coastal regions of India and the neighborhood. There are three components of a cyclone that combine to make up the total cyclone hazard – strong winds, intense rainfall, and oceanographic effects, including high energy waves, strong currents, storm surge, and resulting storm tide. However, vulnerability to storm surges is not uniform along Indian coasts. The west coast of India is less vulnerable to storm surges than the east coast of India in terms of both the height of the storm surge as well as frequency of occurrence. Andhra, Orissa, and West Bengal segments of the east coast are most vulnerable to high surges.

Nonmilitary Threat to National Security

85

The oldest and the worst cyclone on record is that of October 1737, which hit Calcutta and took a toll of 300,000 lives in the deltaic region. It was accompanied by a 12-m high surge. A violent earthquake coinciding with this storm enhanced the destruction. The Bangladesh cyclone of November 8–13, 1970, which crossed Bangladesh coast in the night of the 12th, was one of the worst in recent times with storm surges of 4–5 m in height at the time of high tides and with 25 cm of rain in the areas; the inundation took toll of about 300,000 people (see http://www.imdmumbai.gov.in/cycdisasters.htm).

REFERENCES Aceh talks raise hopes for settlement, Jane’s Intelligence Review (2005, April), p. 22. Aid efforts in Aceh encourage peace talks, Jane’s Intelligence Review (2005, March), p. 40. Alan, J. B. (1995). India, Sri Lanka, and the Tamil Crisis 1976–1994. London: Pinter. Chari, P. R. Newer sources of insecurity: The crisis of Governance. RCSS Policy Studies 3 in India. http://www.rcss.org/policy_studies/ps_3.html D’iima, H. S. (2005, October 22) Why Mumbai is unlivable. Indian Express. Huxley, T. (2005). The tsunami and security: Asia’s 9/11? Survival, 47(1), 123. Indian Express (2005, October 24). Lipschutz, R. (1997). Environmental conflict and environmental determinism: The relative importance of social and natural factors. In: N. P. Gleditsched (Ed.), Conflict and the environment (p. 44). Dordrecht: Kluwer. Louise, L. C. (2005, June 2). Risk, security, and disaster management. Annual Review of Political Science, 8, 335–356 available at http://arjournals.annualreviews.org/doi/abs/ 10.1146/annurev.polisci.8.081404.075608 Narayan Swamy, M. R. (2002). Tigers of Lanka (p. 90). New Delhi: Konark Publishers Pvt. Ltd. Pendse, K. S. Non-military dimensions of Indian security. Defence Today, 74. Presentation by Mr. Brajesh Mishra, National Security Adviser, Government of India on India and the stability of the Asian Continent at Institute Franchise Des Relations Internationale, Paris, 31 January 2001. Robert, J. U., Norwood, A. E., & Fullerton, C. S. (2004). Bioterrorism (p. 127). Cambridge: Cambridge University Press. Schulze, K. E. (2003). The struggle for an independent Aceh. Studies in Conflict and Terrorism, 26, 243. Subrahmanyam, K. (1990, January). Conceptual approaches and general overview of nonmilitary threats to global security. Strategic Analysis, XII (10), 995. Subrahmanyam, K. (1993). Non-military threats to security, security of third world countries (p. 5). In: J. Singh & T. Bernauer (Eds), United Nations, Geneva: UNIDIR Publications. Tamil Tigers face tough choices in wake of tsunami, Jane’s Intelligence Review, March 2005, p. 37. Wildavsky, A. (1988). Searching for safety. New Brunswick: Transaction Publishers.

This page intentionally left blank

NUCLEAR PROLIFERATION IN SOUTH ASIA: A PSYCHO-CULTURAL ANALYSIS B. M. Jain If viewed from the prism of historical experiences of colonialism as well as from the discriminatory application of the nuclear non-proliferation treaty (NPT), it may be safely inferred that it is the nuclear psychology of the ruling elites of Asia, prompting them to develop nuclear weapon programme. One the one hand, NPT has lost its authority, credibility, and a universal appeal that it would spare the world from nuclear danger. On the other, America’s nuclear deal with India is interpreted as rewarding the nuclear India while threatening Iran with punitive action on its nuclear programme. What is more disturbing development is that North Korea and Pakistan have been found guilty of the illicit marketing in nuclear and missile-related material and components. Mohmamed Elbardei, Director General of International Atomic Energy Agency (IAEA), in his special comment stated: ‘‘Nuclear components designed in one country could be manufactured in another, shipped through a third, and assembled in a fourth for use in a fifth. The fact that so many companies and individuals could be involved is extremely worrying, and demonstrates the inadequacy of export control system’’ (Disarmament Forum, 2004, p. 5). He has rightly observed that security concerns of all parties should be heard, and ‘‘the aim should be a new security structure that does not depend on nuclear deterrence’’. Conflict and Peace in South Asia Contributions to Conflict Management, Peace Economics and Development, Volume 5, 87–101 Copyright r 2008 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1572-8323/doi:10.1016/S1572-8323(08)05007-8

87

88

B. M. JAIN

The world community is deeply traumatized over the development of new weapon systems by the United States, Russia, and China despite some respite with the signing of accords, protocols, and memorandum of understanding on arms control and nuclear non-proliferation at bilateral and multilateral levels. However, these measures have not precluded n-weapon states from developing the latest version of missile defense systems to make certain that their national security is not jeopardized. For instance, the United States argues that its missile defence programme is aimed at deterring any potential or even imaginary threat from the so-called ‘‘rogue states.’’ Russia is also activating a new weapon system, the Topol-M, in order to ensure its national security against the probable threat of US missile defenses (see Vardarajan, 2005). In a similar vein, Israel argues that its nuclear missiles are to deter the Iranian threat to its security and viceversa. This paper is divided into three major parts: first, to explain the potency and relevance of a psycho-cultural paradigm in explaining the phenomenon of nuclear proliferation in Asia; second, to examine in brief the status of nuclear deterrence in the wake of new threats emanating principally from terrorist and jihadi organizations; and third, to discuss confidence building measures (CBMs) and nuclear restraint.

PRIMACY OF PSYCHOLOGY AND CULTURE Nuclear proliferation in Asia is basically rooted in psycho-cultural complexes of their ruling elites who are engaged in a frantic search for national security, national identity, and influence by developing n-weapon capability. A propensity for acquiring a credible nuclear deterrence as a security guarantee against any potential threat from adverse or hostile neighbours, political and military elites in volatile regions such as South Asia, Middle East, and Northeast Asia are perpetually indulged in producing artificially insecurity syndrome among their people to legitimize the imperative of nuclear weapon building programme. Inter-Asian regional nuclear collaboration, for instance, between North Korea and Pakistan, between North Korea and Myanmar, between Iran and Pakistan, between Pakistan and China are alarming signs of fomenting the nuclear armament and missile race in Asia. Alexei Arbatov, Director of the Centre of International Security, Institute of the World Economy and International Relations, Russian Academy of Sciences; writes that with the ceasing of ideological and geopolitical rivalry between the two superpowers, nuclear

Nuclear Proliferation in South Asia

89

proliferation has gained momentum in the horizontal proliferation in countries of volatile regions of Asia – India, Pakistan, Israel, Iran, Iraq, Syria, Libya – with the flawed support systems of the NPT, IAEA, and Nuclear Suppliers Group (NSG). For instance, NPT does not offer any tangible benefits to those countries renouncing acquisition of nuclear weapons, nor does it ‘‘envision serious punishment for military nuclear activities’’ (Arbatov, 2004). It is a profound paradox that the ruling leaders in Asia instead of investing their country’s limited resources to development goals are brazenly engaged in producing pro-weapon mass psychology by exaggerating artificial and imaginary threats from neighbours. There is an underlying fact that most of the Asian countries are still facing a gargantuan nationbuilding challenge. More dangerously, self-styled fathers of nuclear programmes, like A. Q. Khan of Pakistan, are posing the gravest threat to peace and security of the world by establishing nuke-networks with the countries of volatile regions such as the Middle East and Northeast Asia for personal benefit. A. Q. Khan’s case in point is a saddening reminder to all peace anchorites and antinuclear proliferation crusaders that the fathers of nuclear weapon are treated as national heroes. Why? It is because of the fact that somewhere and somehow the psycho-cultural perception of the ruling elites informs, influences, and guides decision making in favour of nuclear weapons. Christopher Clary and many other scholars of strategic affairs are of the view that nuclear proliferation is deeply etched in the national psychology of ruling leaders who desire a quick fix of n-weapons against their political rivals. It is based on the notion of national heroes widely propagated and legitimized by Asia’s ruling leaders. This is evident from, for instance, President Gen. Musharraf’s decision to pardon Khan for his ‘‘wrong doing’’ by describing him as ‘‘my hero.’’ Musharraf stated: ‘‘He always was and still is, because he made Pakistan a nuclear power’’ (Clary, 2004). Further, Clary has rightly raised a pertinent question: how to prevent ‘‘future A. Q. Khans?’’ In the case of India and Pakistan, psycho-cultural paradigm is significant in explaining historical hostility between the two countries. Cultural attitudes, in particular, do neatly influence policy and decision makers in New Delhi and Islamabad. For instance, the Hindu–Muslim syndrome in South Asia reactivates the nuclear psychology of people including intellectuals. Not only are people’s cultural affinities getting channelled into generating mass hysteria against each other, but war is also idolized, hostility is

90

B. M. JAIN

institutionalized, and nuclear weapons are legitimized. This is how metaphysical concerns of culture are gradually transformed into ‘‘modern hate,’’ and historical hostility is projected as a political necessity to outmanoeuvre the other. Huntington’s ‘‘clash of civilizations’’ theory is somewhat misleading. It is not a ‘‘clash of civilizations’’ but a clash of competing psychologies borne out of contrived fears. The concept of ‘‘jihad’’ or ‘‘holy war’’ is defined and sustained through the projection of the inherent psychology of a particular culturally organized community. If this is defined in terms of tradition, the ‘‘dominant motif’’ of inciting mass psychology in favour of n-weapons is to cling to the value-laden tradition to preserve one’s cultural identity. In historians’ perceptions, traditions are the product of social environment, and by this logic they tend to change when the social environment changes (Jain, 2001). The ‘‘psychiatric school’’ of thought believes that the past is crucial for understanding the national psyche and the psyche of people and that of leadership in particular. In this respect, both India and Pakistan have remained captives of their national psyche, which is rooted in the partition theory. The dilemma is more of a psychological nature. From the Indian perception, it is Pakistan that is perpetually engaged in destabilizing India through aiding and abetting militancy in several parts of the country. From the Pakistani perception, India is a real troubleshooter, not yet prepared to accept its existence and identity as a nation-state. Is there any short-cut for creating conducive conditions for arms control negotiations or for resolving the nuclear tangle? Basically, the psychological problem remains at the heart of the nuclear proliferation. A myth has been created by a handful of top-brass in civil and military bureaucrats both in New Delhi and Islamabad that there is strong support to their nuclear weapons programme. Influential elites including court intellectuals believe that nuclear deterrence would prevent countries from engaging in a nuclear exchange. It is absurd to think so because the theory of nuclear deterrence does not function where political decisions are psycho-cultural centric, where rational choice model is overshadowed by past prejudices and personal idiosyncrasies. The fact is that both sides are indulging in glorifying nuclear tests. One might recapitulate that scientists and engineers in both countries were given the red carpet treatment. Ruling leaders eulogized nuclear feats achieved by them. The way the post-test events were celebrated in both countries gave a clear-cut impression as if it were a cricket test match. Nuclear tests were celebrated as if winning a cricket match given the fact that people in both countries are psychologically overcharged to do or die. In fact, they are ill

Nuclear Proliferation in South Asia

91

prepared to accept defeat in a game when two historically hostile neighbours are involved in the competition. What do all these indicate? If not psycho-cultural megalomania, then what? The thesis is further validated when certain constituencies in both countries are indulgent in mystifying their bombs along with symbols of their religion and culture. The press in both countries carries out funny stories. If the Indian bomb is being termed as ‘‘Hindu Bomb’’ and that of Pakistan as ‘‘Islamic Bomb’’ in their respective circles, does it not support the theory that contrary and hostile psycho-cultural perceptions deeply rooted in India and Pakistan are the real source of Indo-Pakistani estrangement? Though it may not be appropriate to give such absurd prefixes, it reflects the reality of people’s inner consciousness or sub-consciousness of their on-going psychic activities. So the truth is deeply entrenched in the inner layers of their mental and psychological make-up. American policy makers are inwardly scared of the Pakistan bomb having religious and cultural affinity with the Muslim world. Critics of psychocultural prophylaxis (PCP) may not agree with its validity, but they cannot out right reject it as ‘‘utopia.’’ If this has been so, why are researches being carried out on the psychological reasons behind Hitler’s decision to declare World War II and on his genocide policy? In the 1967 Arab–Israel War, it was pre-eminently the psycho-cultural reason that prompted Israel to take the first-strike decision, overwhelming its both mortal and psychological enemy. According to the ‘‘psychiatric school’’ of thought, to cure such maladies we need psychotherapy. The treatment of psychological problem lies in PCP. The PCP is a preventive treatment so as to ward-off impending tensions and conflicts. How can one achieve the maximum result with the minimum of investment? Yes, the PCP, in cost-benefit terms, is a correct prescription provided its dose is administered regularly until its positive and lasting effects are felt by a patient – maybe an individual person, a group, a community, or nations (Jain, 2001).

NUCLEAR DETERRENCE It is not the intention of this article to discuss the theory of nuclear deterrence in details. It may be pointed out that both India and Pakistan have retained the nuclear deterrence option as a blanket guarantee to their national security from each other’s threat. There is a divided opinion among strategic experts about the efficacy of nuclear deterrence. According to the

92

B. M. JAIN

one section supporting pro-government policies, the retention of a nuclear deterrence is essential for national security against any potential or probable threat from an adversary or adversaries. While some independent strategic analysts question the credibility of nuclear deterrence, in support of their contention they cite a classical case of the Cuban missile crisis, which was not nuclear deterrence but the statesmanship of Kennedy and Khrushchev that facilitated averting nuclear catastrophe. Do India and Pakistan have such statesmen of the stature of Kennedy and Khrushchev? The answer is in the negative. In a realistic sense, nuclear deterrence is structured on a psychological base. Both India and Pakistan are, for instance, captives of their narrowly structured perceptions of seeing each other as one’s enemy. The mutually held enemy images tend to become a constant source of tension between New Delhi and Islamabad. The time is up when India and Pakistan need to stop thinking in only narrow geo-political and geo-strategic terms. However, the dilemma is that though geopolitics has changed at the global layer, geo-psychology of ruling leaders at the regional layer remains the same. That is why there has been no breakthrough in the political dialogue between India and Pakistan on bilateral issues, notably on Kashmir and nuclear non-proliferation. Enigmatically, sometimes there is a nuclear standoff, at times a military standoff between the two countries. And currently there is a politico-economic standoff between New Delhi and Islamabad following the Mumbai rail blasts in July 2006. They are indulging in a senseless, hysteric cold war debate by accusing each other without tangible gains in return in the face of gargantuan challenges of the economic development and welfare of the people (Jain, 2005). More significantly, nuclear deterrence in the light of new challenges emanating from international terrorist groups has become redundant. The possibility of nuclear and weapons of mass destruction (WMD) falling into the hands of ‘‘non-state entities’’ has added a new dimension to the obvious failure of the nuclear deterrence doctrine. This will ‘‘put an end, once and for all, to nuclear deterrence as a doctrine for protecting one’s national security. Terrorists need nuclear weapons not for the purpose of deterrence, but for direct employment, as well as blackmailing states or the entire civilized world’’ (Arbatov, 2004, p. 1011). Arbatov further argues that nuclear deterrence is futile in view of the fact that ‘‘terrorists have no territory, industries, population, or a regular army that might be targets for retaliation’’ (2004). The only alternative is to hunt down and neutralize terrorist leaders, organizers, and ideologists, as well as to destroy their material and financial infrastructures. Additionally, there is the need to

Nuclear Proliferation in South Asia

93

protect many nuclear power engineering facilities, as well as the facilities for storing nuclear munitions and materials (Arbatov, 2004).

DOUBLE MORAL STANDARDS Geopolitics in South Asia took an ugly turn in the global political order following the May 1998 nuclear weapon tests conducted by India and Pakistan. The United States, Russia, and China expressed their disapproval of these tests in accordance with political exigencies that suited their national interests. There was a widely shared perception by the world community that the nuclear race between India and Pakistan might trigger nuclear incentives among the countries of the Middle East and Northeast Asia, which are already clandestinely involved in an illegitimate nuclear weapon-building programme. Fearing this, America and Japan slapped an economic embargo on India and Pakistan, and the international community continued to put pressure on them to sign the CTBT without any conditionality. Initially, the psychological pressure from the world community was quite intense. Gradually, it became quite nebulous. The United States reconciled itself to the ground reality that India and Pakistan are de facto nuclear weapon states (NWSs). This was clearly reflected in its foreign policy approach. The Bush administration lifted sanctions against India and Pakistan in the aftermath of 11 September 2001, attacks in New York and Washington. Some sanctions on the transfer of dual-use commercial technology and defence related advanced weapons still operate against India. The Bush administration is reconsidering removal of these sanctions in the near future. Strategic analysts interpret it as an ‘‘astounding development’’ in the mutual strategic understanding between New Delhi and Washington. Also, Pakistan’s key role in helping the United States and allied forces in their mission against destroying the Al Qaeda terrorist hideouts in Afghanistan has obligated the United States to reward Pakistan in several ways, such as committing economic and military assistance worth $3 billion and rescheduling funds from international financial institutions, like the World Bank, IMF, and the Asian Development Bank. From the Indian perspective, China’s supply of nuclear and missile technologies to Pakistan is not only a major factor of irritation between India and China, but also a prime cause of instability in South Asia. China has retracted from giving firm assurance to India that it would stop assisting Pakistan’s ongoing missile building programme. Practically speaking, China is not going to dilute its strategic ties with Pakistan at the cost of coming

94

B. M. JAIN

closer to India. In other words, the Pakistan-factor will continue to remain a critical variable in Sino-Indian relations despite the end of the Cold War. Nevertheless, what is important to bear in mind is that China, in a fast changing geo-strategic scenario following the 11 September 2001 terrorist attacks, would neither come forward openly to support Pakistan’s repeated demand for self-determination on the Kashmir issue under the UN resolutions, nor would offer any solidarity with Pakistan’s diplomatic and moral support to separatist elements in Jammu and Kashmir whom Islamabad dubs as freedom fighters. In a realistic sense, China can ill-afford to support Pakistan directly or indirectly on the question of selfdetermination since Beijing itself is facing the Muslim separatist elements in its Xinxiang province. On the other hand, America has asked China in unambiguous terms that it will not tolerate misusing the global campaign against terrorism by crushing its minority groups or violating human rights in Tibet.

CBMs AND NUCLEAR RESTRAINT CBMs involve a complex play of a myriad social and political forces, economic and strategic perceptions, and defence and security concerns of national actors who are bound to function in the given social terrain, which may or may not be hospitable for a reduction in persisting tensions between neighbouring countries. The real dilemma linked with achieving mutual nuclear restraint through CBMs is how to dilute, if not dispel altogether, images of mutual hostility deeply etched in the ruling elite’s psyche. This dimension has not been properly addressed and fully explored by scholars working on nuclear CBMs. The success of CBMs largely depends on whether the past images of congenital hostility between New Delhi and Islamabad have been replaced by positive images of one another as an essential condition for nuclear stability in the region. Mere advocacy of CBMs does not resolve the problem. In order to attain the concrete outcome of CBMs, India and Pakistan in South Asia, North Korea and the rest of negotiators in East Asia, Iran and the rest of the dialogue partners will need to adopt a realistic approach to defuse the nuclear crisis. For this, CBMs in other areas such as increasing political rapprochement between leaders, strengthening of economic and trade linkages are imperative for reduction in nuclear proliferation risks as well as in averting the possibility of nuclear weapon deployment by either country out of sheer desperation or miscalculation (see Michael and Gagne, 2003).

Nuclear Proliferation in South Asia

95

Moreover, the vengeance lobby on both sides also continues to pollute public minds and exhort them into launching a vitriolic propaganda of mutual hatred on a massive-scale making it tougher to implement CBMs. This has been amply demonstrated in cases of India and Pakistan and also the Arab countries and Israel who are interlocked into a permanent bloody conflict. Hence, the basic problem remains how to reverse the people’s psychology working at different competing edges (for details see Jain, 1994). If India and Pakistan, for instance, need to ensure nuclear restraint on both sides, they will need to undertake concrete measures at a bilateral level, reinforced through multilateral initiatives and efforts, to prevent further proliferation as well as to avert nuclear mishap due to political folly or to accident or miscalculation. This apart, confidence-building initiative ought to emerge from those enlightened people who have political roots in their respective constituencies. It has been experienced over the past several years that professional politicians and armchair intellectuals, virtually cut off from masses, have neither mass appeal nor do they have adequate understanding of people’s perceptions. Consequently, they are unable to create bridges of mutual understanding and harmony between different segments of communities. At such a critical juncture, citizenry intervention is warranted given the vested interests of pro-weapon lobbyists, for example, in India, Pakistan, Iran, and North Korea who are making every effort to foil the nuclear nonproliferation initiatives at bilateral and multilateral levels.

NUCLEAR WEAPON FREE ZONE (NWFZ) STRATEGY The strategy of establishing NWFZs is apparently perceived as a nonproliferation and security-enhancing measure as well as a partial step towards an eventual global elimination of nuclear weapons. The UN has defined NWFZs as requiring the ‘‘effective prohibition of the development, manufacturing, control, possession, testing, stationing, or transporting’’ of nuclear weapons within the zone region, both by the regional parties and NWS (Hamel-Green, 2005). This strategy paid-off. The Latin American Tlatelolco Treaty of 1967 was the first major initiative towards propping up the regional NWFZs in other parts of the world. The 1985 South Pacific Nuclear Free Zone Treaty, the 1995 Southeast Asia Nuclear Weapon Free Zone, the 1996 the African Pelindaba Treaty for denuclearization in Africa, and efforts at the Central Asian Nuclear Weapon Free Zone are indicators that members of the world

96

B. M. JAIN

community have an expressed desire to denuclearize their respective regions for fulfilling the goal of a global non-proliferation regime. The real dilemma facing the NWFZs in volatile regions such as the Middle East and Northeast Asia is how to address the psycho-cultural problems of the ruling elites and general masses who, for security reasons vis-a´-vis their hostile neighbours, are favouring developing n-weapons. For instance, in the Middle East Asia the ‘‘continuing severe conflicts between regional states, particularly between Israel and its Arab neighbours, coupled with widely held assessments that Israel has already acquired nuclear weapons and that several other states in the region have in the past or are now actively seeking nuclear or other WMD capabilities’’ (Hamel-Green, 2005, p. 16). Iran’s nuclear standoff is another example. Iran in the past couple of months has come into direct conflict with the United States. Iranian ruling leaders have declared publicly that their country would continue its nuclear programme since peaceful use of nuclear technology is its ‘‘inalienable’’ right as an NPT signatory. Iran has charged the United States for practising double standards by rewarding India, a non-NPT member, as manifest from the signing of a civilian nuclear energy cooperation agreement between Washington and New Delhi during President Bush’s visit to New Delhi in March 2006. Whereas, President Bush and Condoleezza Rice have brushed aside this charge arguing that India falls under a ‘‘unique category’’ on account of India’s impeccable record as a responsible NWS. However, Iran is not convinced by the Bush administration’s logic, while another lobby working in favour of Iran consists of Russia and China who are urging the United States and the UN Security Council to desist from undertaking punitive measures like slapping military or economic sanctions on Iran, fearing that these might seriously jeopardize international peace and security. President Hu Jintao in his several meetings with President Bush reiterated that the Iran case needed to be handled tactfully by giving more political space to Iran in order to stave off horrendous consequences. So far as the North Korea nuclear crisis is concerned, the six-nation dialogue remains stalled due to obstinate positions taken-up by North Korea and the United States. The problem in this region, according to Michael Hamel-Green, is quite peculiar unlike other regions. He writes: ‘‘Despite the security interdependence of this region, there is no Northeast Asian regional political forum analogous to ASEAN, the African Union, the Organization of American States, or the European Union with regional states preferring to rely on bilateral relationships: North Korea with China, and Japan and South Korea with the United States. This has meant that there have been

Nuclear Proliferation in South Asia

97

fewer regional opportunities to discuss and explore the establishment of cooperative security agencies and arrangements, such as the Organization for Security and Co-operation in Europe (OSCE), although since the 1990s the ASEAN Regional Forum (ARF) has begun in a limited way to play this role’’ (Hamel-Green, 2005, p. 19). There is some truth in this assessment. The real problem is rooted in contrary geo-psychological perceptions and approaches. How? First, the geo-psychological approach of North Korea is deeply embedded in its assessment that the United States is the single greatest threat to its national security (see Sigal, 2006). The Pyongyang regime is demanding a blanket guarantee of security from Washington that it would not pose any military threat to its security and survival. Second, the Bush administration has been insisting that North Korea should first dismantle its nuclear weapon related programme if it wants to ensure its physical and energy security from the United States. Third, China, although playing the role of a facilitator and principal mediator, is desirous of utilizing the strategic opportunity in its favour while knowing well that America has no other option than to depend on Beijing for the latter’s role as a crisis manager. Moreover, because of the Bush administration’s imprudent policies, America is bleeding itself in Iraq and Afghanistan. Also, the administration is in serious trouble over Iran’s nuclear program. The cumulative impact of these developments is that, from a geo-psychological point of view, China is in a better and firmer position to assert its role in the Korean peninsula. However, the unanimous passing of the Security Council’s resolution 1695 of July 2006 is a clear indicator that China did not exercise its veto power with a view not to complicate its relations with the United States. The resolution demands from the Democratic Republic of Korea (DPRK), i.e., North Korea, to suspend its missile programme and ‘‘re-establish’’ its one-time moratorium on missile tests (see Suryanarayana, 2006). In fact, North Korea’s test firing of a series of missiles on 5 July 2006, was a deliberate attempt, rather a provocative act on the part of the Pyongyang regime, to display its political resolve to strategically defy the Bush administration’s veiled threat of the use of force against it if North Korea does not suspend its nuclear and missile programme. In this scenario, the Security Council’s passage of a unanimous resolution does not resolve the crisis unless pragmatic and prudent diplomatic initiatives are resumed multilaterally. Why? Because, the North Korean missile or nuclear related programme is psychologically attuned to both the national and regional dynamics in which DPRK, Japan, and South Korea are concerned about their respective national security as well as the regional security balance. Given the

98

B. M. JAIN

complexity of the problem, China is not likely to abdicate its role either in favour of Japan or the US–Japan strategic alliance. Rather, Beijing would prefer to play the role of a facilitator in the six-party dialogue in cooperation with Moscow that shares common geo-strategic interests in the region.

NEW THREATS As mentioned earlier, nuclear proliferation has assumed a new dimension in the face of a perceived and potential nuclear threat stemming from non-state actors and jehadi elements who might get hold of nuclear weapons in failing states of Asia. Joseph Cirincione, director for Non-Proliferation programmes at the Carnegie Endowment for International Peace also subscribes to the view that today’s greatest threat stems from the wide availability of highly enriched uranium and plutonium, the fissile materials that are the fuel of nuclear bombs (Cirincione, 2005). In line with a similar argument of Arbatov, Joseph Cirincione says: ‘‘While states can be deterred from using nuclear weapons by fear of retaliation, terrorists, who do not have land or people or national futures to protect, may be more difficult to deter. Terrorist acquisitions of nuclear weapons therefore pose the greatest single threat’’ (Cirincione, 2005, p. 159). He has cited the former republics of the Soviet Union and Pakistan as the ‘‘most likely sources’’ of nuclear materials for terrorists. After the horrible tragedy of 11 September 2001, President Bush himself has reiterated on several public occasions that NPT has outlived its utility in face of emerging threats from terrorists groups having the solid backing of Al-Qaeda and Taliban elements. This is one of the reasons that America is not insisting on India abiding by the NPT and CTBT, for the Bush administration understands that India’s nuclear programme is not a threat to international and regional peace and security. What is saddening is that the world community has not come out with some concrete policy agenda as to how to deal with the situation arising out of the smuggling of nuclear weapon systems or building a crude nuclear weapon programme. Second, the NSG has also failed in its obligation by evolving appropriate mechanisms in order to avert any probability of nuclear-related material falling into the hands of terrorist organizations. Third, there are no comprehensive and reliable mechanisms for controlling the export of nuclear material from member countries of the NSG. Fourth, the Missile Technology Control Regime (MTCR) has failed to halt the proliferation of missile development programme in Asian countries. China,

Nuclear Proliferation in South Asia

99

for instance, being a member of MTCR, has been charged with transferring several variants of missiles, like M11 missiles, to Pakistan. This shows that the MTCR has neither modalities nor methods to check illegal transfer of missiles nor does it have any authority to punish the violators.

CONCLUSION Whatever options and alternatives are available at the moment appear utopian without properly addressing the psycho-cultural prejudices and predilections of Asian nations towards one another for historical and geopolitical reasons. Volatile regions of South Asia, the Northeast, and the Middle East provide a classical case study for further research into the psycho-cultural dimensions of nuclear proliferation in Asia. Nuclear proliferation in South Asia will remain a major challenge to the entire world community if India and Pakistan fail to resolve their bilateral problems and succeed in their CBMs to create mutual trust. Similarly, ArabIsrael hostility is likely to perpetuate, may be with a faster pace and deeper intensity. Be that as it may, it would further prop up the propensity to build nuclear weapons on the part of Iran, Israel, Egypt, Syria, and Saudi Arabia. Nuclear proliferation in volatile regions of Asia will remain pegged to the psychological and cultural attitudes of their ruling elites, who would not spare any effort to help sustain the pro-weapon mass psychology either by exaggerating artificial and abstract threats from adversaries and hostile neighbours or by extolling the national pride in having such weapons – the currency of power, prestige, and influence. Unless psycho-cultural attitudes of people are adequately addressed and researched, perhaps the problem of nuclear proliferation in Asia cannot be resolved permanently. A full-fledged research in this area is the imperative need of time when the entire world community is facing the twin problem of halting nuclear proliferation at State level on one hand and preventing WMD from falling into the hands of terrorist organizations and individuals on the other.

REFERENCES Arbatov, A. (2004, July). Horizontal proliferation: New challenges. Strategic Digest, 38(7), 1005. Cirincione, J. (2005). A new non-proliferation strategy. SAIS Review, 25(2), 157.

100

B. M. JAIN

Clary, C. (2004). A. Q. Khan and the limits of the non-proliferation regime. Disarmament forum, No. 4. Geneva: United Nations Institute for Disarmament Research, p. 34. Hamel-Green, M. (2005). Regional initiatives on nuclear and WMD-free zones: Cooperative approaches to arms control and non-proliferation, Geneva: United Nations Institute for Disarmament Research, UNIDIR/2005/19, p. 3. Jain, B. M. (1994). Nuclear politics in South Asia: In search of an alternative paradigm. Jaipur: Rawat. Jain, B. M. (2001). India-Pakistan relations: The need for psycho-cultural prophylaxis. In: Ramakant, S. N. Kaushik, & Shasi Upadhyaya (Eds), Contemporary Pakistan: Trends and issues (Vol. II, pp. 187–198). New Delhi: Kalingo Publication. Jain, B. M. (2005, December). IAHA conference paper presented at Taipei conference, Taipei, Taiwan. Michael, K., & Gagne, C. (Eds). (2003). Nuclear risk reduction in South Asia. Washington: Henry L. Stimson Centre. Sigal, L. V. (2006, July 27). What North Korea’s missile test means. http://www.nautilus.org/ fora/security/0662Sigal.html Suryanarayana, P. S. (2006). Power game in East Asia. The Hindu, July 24, OP Ed., p. 11. Vardarajan, S. (2005). America, India and outsourcing imperial overreach. The Hindu, 13 July, p. 10.

FURTHER READING Brown, M. E. (Ed.) (2003). Grave new world, security challenges in the 21st century. Washington: Georgetown University Press. Chengappa, R. (2000). Weapons of peace: The secret story of India’s quest to a nuclear power. New Delhi: Harper Collins Publishers. Ganguly, S., & Hegarty, D. (2005). Fearful symmetry: India-Pakistan crises in the shadow of nuclear weapons. Seattle: University of Washington Press. Hagerty, D. T. (1998). The consequences of nuclear proliferation: Lessons from South Asia. Cambridge: MIT Press. Hagerty, D. T. (Ed.) (2005). South Asia in world politics. Lanham: Rowman & Littlefield Publishers. Ikenberry, G. J. (2006). Liberal order and liberal ambition: Essays on American power and world politics. Cambridge: Polity Press. Jain, B. M., & Hexamer, E. M. (Eds). (1999). Nuclearisation in South Asia: Reactions and responses. Jaipur: Rawat Publications. Kapur, A. (2006). India – From regional to world power. London: Routledge. Kapur, H. (1994). India’s foreign policy, 1947–1992: Shadows and substance. New Delhi: Sage. Katzenstein, P. J. (2005). A world of regions: Asia and Europe in the American imperium. Ithaca: Cornell University Press. Keith, R. C. (Ed.) (2005). China as a rising world power and its response to globalization. London: Routledge. Krepon, M. (2005). The stability-instability paradox, misperceptions, and escalation control in South Asia. In: R. Dossani & H. S. Rowen (Eds), Prospects for peace in South Asia (pp. 261–279). Stanford: Stanford University Press.

Nuclear Proliferation in South Asia

101

Nayar, B. R., & Paul, T. V. (2003). India in the world order: Search for major power status. New York: Cambridge University Press. Nye, J. S., Jr. (2007). Understanding international conflicts: An introduction to theory and history (6th ed.). New York: Pearson Longman. Olivia, B., & Van Ham, P. (Eds). (2007). Global non-proliferation and counter-terrorism: The impact of UNCR 1540. Washington: Brookings Institution Press. Paul, T. V. (Ed.) (2005). The India-Pakistan conflict: An enduring rivalry. Cambridge: Cambridge University Press. SarDesai, D. R., & Thomas, R. G. C. (Eds). (2002). Nuclear India in the twenty-first century. New York: Palgrave. Talbott, S. (2004). Engaging India: Diplomacy and the bomb. Washington: Brookings Institution Press. Tellis, A. J. (2001). India’s emerging nuclear posture: Between recessed deterrent and ready arsenal. Santa Monica: RAND, Project Air Force. Tellis, A. J. (Winter 2002). The strategic implications of a nuclear India. Orbis, 46(1), 13–45. Tellis, A. J., Christine Fair, C., & Medby, J. J. (Eds). (2001). Limited conflicts under the nuclear umbrella: Indian and Pakistani lessons from the Kargil crisis. Santa Monica RAND Corporation.

This page intentionally left blank

PART II OTHER SOUTH ASIAN COUNTRIES

This page intentionally left blank

MANAGING DEVELOPMENT FOR PEACE: SRI LANKA Penelope Hood In June 2003 international donors in the Tokyo Conference pledged over US $4.5 billion for the reconstruction of the North, East and South of Sri Lanka, areas devastated by war during the previous 20 years. Money was also earmarked for developments in the South of the island with the objective to build a strong economic infrastructure. However, this can only be achieved by an effective workforce who can begin to meet the challenges of global competition and reconcile the balance of payments by significantly increasing productivity. This requires excellent managers. If this essential economic revolution is to take place, private and public companies need to be more dynamic. When interviewed, many of the Chief Executive Officers (CEOs) seemed clear about the direction in which they wanted their enterprises to develop, but reluctant to take risks and empower senior managers. Most of these senior managers are both resourceful and able. A high percentage of managers are MBA graduates who understand the concepts and techniques of management and practise these daily in their organisations. Six of the thirteen state universities governed by the University Grants Commission, in addition to an increasing number of private universities who are in partnership with UK, Canadian, US, Australian and Southeast Asian Universities offer a range of MBA degrees.

Conflict and Peace in South Asia Contributions to Conflict Management, Peace Economics and Development, Volume 5, 105–124 Copyright r 2008 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1572-8323/doi:10.1016/S1572-8323(08)05008-X

105

106

PENELOPE HOOD

The energies of talented and competent managers now need to be released so that they can lead the way to a buoyant economic infrastructure as agents of change. There are promising signs that this is already beginning to happen. However, strategies need to be introduced to optimise the effectiveness of managers and to co-ordinate the integration of projects. Through the establishment of relevant management development programmes specific to the North, East and South, a strong base for future development and the intellectual capital of the country can be built. Such a project will require to be managed locally, using ICT, with all assignments contextualised within the specific needs of the post-war situation of the North, East and South. Government incentives, dedicated funding and careful monitoring will be essential to its success.

SETTING THE SCENE An international aid conference held in Tokyo from 9 to 10 June 2003, conducted with the participation of 51 countries and 20 international finance agencies, granted US $4.5 billion over a 4-year period to Sri Lanka (www.news.bbc.co.uk (a)). The aid, pledged by donors for development and reconstruction in Sri Lanka, was conditional upon the successful continuation of progress towards a permanent solution to the ethnic conflict. The Prime Minister promised ‘a provisional administrative structure with wider powers to the LTTE’ (Wickramasinghe, 2003b), suggesting that the Tokyo aid would enable the implementation of a new framework to re-energise Sri Lankan peace and development. However, the aid package has elicited mixed reactions from key players. In particular, the Liberation Tigers of Tamil Eelam (LTTE) are refusing to participate in further peace negotiations until there is a more equitable distribution of resources, resulting in more aid being allocated to the areas of need in the North, East and South. That is, those areas where they wish to have greater control, and they have condemned the proposed new administrative structure. With sporadic violent incidents still taking place in the North and child soldiers being abducted from civilian populations (The Island, 25th July 2003), more than a third of the total population of Sri Lanka (approximately 19 million) live in poverty. Forty five per cent live on an income below US $2 per day and over six per cent have an income below US$1 per day (Institute of Policy Studies, 2002). The annual defence budget (US $350 million) takes up one third of the total government revenue

107

Managing Development for Peace: Sri Lanka Table 1. Sinhalese (%) 81.92

Sri Lanka: Percentage Distribution Ethnicity 2001.

Sri Lanka Tamils (%)

Indian Tamils (%)

Sri Lanka Moors (%)

4.33

5.08

8.01

Source: Census Office Central, 2001.

(www.bbc.co.uk (c)) second only to Pakistan in percentage of GDP and with total public debt in excess of GDP. It is a country ready for a major change. There has been a truce since Christmas Eve 2001, brought about through peace processes conducted by Norwegian negotiators. January 2002 began with great optimism in Sri Lanka. There was hope for the first time in nearly two decades of civil war. The current economic climate in Sri Lanka is inextricably linked to the political situation. A multiethnic society, Sri Lanka has endured civil war since 1983 between the Sinhalese majority and the LTTE who claim to represent the country’s Tamil minority (Dunphy, 1999; Peiris, 1999). Table 1 below illustrates the Sri Lankan ethnicity profile. The United National Front (UNF) party, led by Prime Minister Wickramasinghe, won the 2001 elections, defeating the President and previous leader of the government, Chandrika Bandaranaiyake Kumaratunga, leader of the People’s Alliance Party, by promising an end to war. Donor money has been given to rehabilitate and reconstruct the war ravaged North, East and South as well as sums that have been earmarked for developments in the South of the island with the objective of building a strong economic infrastructure. The government has the backing of major sectors of Sri Lankan business. It is widely believed that the conflict is a barrier to foreign investment and economic growth. Planning and strategic management will be essential if Sri Lanka is to develop an effective workforce that can begin to meet the challenges of global competition and reconcile the balance of payments by significantly increasing productivity. This will require excellent managers to develop a sustainable, dynamic workforce. If the current political difficulties can be addressed and a cessation of hostilities achieved, Sri Lanka has the natural resources and labour potential to enter the international arena. Boosted by the promise of stability, improved security situation, changing government policies and supported by Tokyo aid, Sri Lanka is poised to introduce critical changes within both the public and private sectors, thus improving national economic health and resulting in poverty relief.

108

PENELOPE HOOD

INVESTING IN PEOPLE Sri Lanka was described as ‘one of the most promising states in Asia following independence in 1948’ (Rotbert, 1998). Sri Lanka was much stronger financially and had substantial resources to finance development whilst Japan, for example, had to depend on external loans. Yet Japan succeeded and Sri Lanka has failed to prosper despite a more auspicious beginning. The development strategy to be pursued in the coming years is presented in the recent government policy document ‘Regaining Sri Lanka: Vision and Strategy for Accelerated Development (RSL)’ (Wickramasinghe, 2003a). It aims at 8–10% economic growth and to push up the per capita income, which at present is US $872 to US $2,000. Poverty reduction, which receives greater emphasis in this strategy, is expected to benefit the poor, that is, nearly half of the population. Policy reforms in areas of fiscal management, finance, trade and investment and labour for revitalising the private sector have been identified. It is expected to create 2 million new jobs (Wickramasinghe, 2003a). This has already received the support of donors. An unprecedented amount of foreign assistance is awaiting formal commitment. The most critical of the external factors identified as determining the level of success of RSL is the resolution of conflict in the North, East and South. Professor Karunasena Kodithuwakku, Minister of Human Resource Development, Education and Cultural Affairs, in a recent speech at the Sri Lanka Economic Association annual conference claimed: There is no disagreement with the significance of this factor. It would reduce the budgetary pressures, further boost investor confidence, help fortify the current revival process and enhance the performance of all sectors of the economy and in particular ensure the return of the North, East and South to make a better contribution for growth and development processes. (Kodithuwakku, 2003)

The conflict in the North, East and South was a phenomenon of the past two decades only. There had been almost three and a half decades of governance prior to the troubles, relatively peaceful times and conducive to economic development. But economic development did not take place. Economic problems worsened and boomeranged in the form of insurrections in the South and a two-decade war in the North, East and South. Nevertheless, the Tokyo Donors’ Conference heralded a new beginning. But grants and low interest loans are clearly not sufficient to resolve the real problem underlying the current state of the Sri Lankan economy. This can

Managing Development for Peace: Sri Lanka

109

only be adequately addressed by a dynamic and effective workforce that should develop the necessary skills to meet the challenges of global competition and reconcile the balance of payments by significantly increasing products from the rich resources of Sri Lanka. The Central Bank (2002) figures show that Sri Lanka’s external position has improved only slightly over 2002 in terms of a sharp rise in both imports and exports. Export earnings for December 2002 were up 27% to US $496 million while imports hiked 52% to US $627 million. The trade deficit widened to US $132 million from US $21 million in December 2001 (Sri Lanka Exporter, 2003). In the current environment, more and more inbound development capital will be channelled via the banking sector. According to the Hatton National Bank stockbrokers, the banking sector is poised to continue with the upward trend that has made it the most profitable sector in the Colombo stock market during the past year. Economic activity is also stimulating the construction sector that is expected to strengthen its links with banks. A recent example was the construction of the enormous Hatton National Bank Tower, a 23-storey building situated in Colombo. Acclaimed as the most energy-efficient building in Sri Lanka, it is one of the most modern in South Asia. But much more has to happen. How is an effective workforce to be developed and sustained? There seems to be an organic relationship between the work environment and performance; people will perform to higher standards on a constant basis only if their working environments provide the motivation and stimulus for it (Drucker, 1995; Hood, 2002). Where this is absent, people may show on occasions, signs of outstanding levels of performance. But it does not last; they remain only random events. It is not merely the environment that is critical but also the emotional climate that can positively influence the professional development of staff (Hood, 2003). Many sophisticated global organisations have understood this reality and designed systems to accommodate these needs. Motorola is one such organisation. It has developed a broad-based approach to identify, elevate and resolve employee issues (Belgamage, 2003). In its ‘Individual Dignity Entitlement Programme’ each quarter, employees are asked to answer pointed questions about their working life and to review them with their supervisors. The questions cover areas such as meaningfulness of the job, the required knowledge base, skills, career plans and sensitivities to personal circumstances, for example. Unresolved issues can percolate as far as the CEO. Most senior managers see their main responsibilities as shaping, defining and articulating purpose; planning strategies, organising staff, setting

110

PENELOPE HOOD

budgets, solving operational problems and so on. These are essential components of a manager’s job certainly, but what is equally or even more important is guiding people effectively through organisational processes. This approach calls for managers to shape the behaviour of people and to create environments that enable them to act with initiative and perform at peak levels as a matter of routine. As Belgamage (2003, p. 34) argues: Until this is done and effective processes are put in place to achieve the objective, ‘productivity measurement’ as we understand it in Sri Lanka will remain an academic exercise devoid of any meaning and serving no useful purpose.

The workforce must be led by transformational leaders and its energies released to regain Sri Lanka and secure a lasting, peaceful and sustainable development for the next generation (Evans & Hood, 1998).

ENERGISING SRI LANKAN ORGANISATIONS Although 2002 marked a turning point on account of the cease-fire, the economy has not yet demonstrated the essential improvement. Indeed, in 2001 the economy contracted by 1.4%, representing the first negative growth rate since independence. This might be partly explained by the paradox of a country that enjoys high literacy rates, with predicted rates of female literacy 95% and male literacy 97% by 2005 (www.accu.or.jp), and yet demonstrates the lowest labour productivity rate in Asia. Current challenges already identified include (Institute of Policy Studies, 2002; USAID, 2002):    

Reviving growth by stimulating investment ad productivity Decline in growth of industrial exports Managing fiscal balances Poor infrastructure

However the ongoing peace process, aid from donor countries, the improving security situation and changing government policies all favour foreign investment. Indeed the Ambassador for France recently stated: The advent of an era of peace in Sri Lanka will attract the French business sector keen to invest but previously prevented from doing so by political uncertainty and insecurity. (Paignier, 2003)

It is likely that Sri Lankan managers will be facing severe competition from foreign investors developing business in Sri Lanka in the near future.

Managing Development for Peace: Sri Lanka

111

A major productivity boost is needed through a national effort to drive the economy, increasing exports and improving the balance of payments. Apart from tourism and remittances from migrant workers, the economy depends on the export of tea, rubber and garments. The country is highly vulnerable due to the concentration in a few export products and markets. An over-dependence on garment exports (53% of total exports and a contribution of 5.3% of GPD in 2002) is likely to be reflected in the national economy in 2005 with the removal of tariff quotas in the garment industry. The years immediately following World War II saw the growth of mass production; however, rising labour costs and competition from cheaper and more efficient manufacturing countries pose a major threat (Koshy, 1999). It is anticipated that with the opening up of the free-trade zones, in excess of 50% of factories will have to close – currently there are more than 330,000 direct employees working in over 1,000 factories. Unemployment currently runs at approximately 9%. In a country without unemployment benefits, a rise in these figures would be disastrous for those affected by employment cuts. The garment industry is the largest provider of employment and major foreign exchange earner. This is now under threat from changes in policy and fiscal agreements. The current quota system, which gives an assured market, is being phased out during the period 1995–2005. Local competition is increasing, for example, the African Growth and Opportunity Act 2000 (AGOA) provided quotas and duty free access in Sri Lanka to some 17 African countries (US Department of Commerce, 2002). In order to remain competitive in a low technology and labour intensive industry, effective management will be critical, ‘yit will be essential to improve operational capability of staff through effective management, training staff in management related subjects’ (Airbus Industries Quarterly Report, 2001). Specific challenges are:     

The rising cost of labour Low productivity High absenteeism High labour turnover Weak quality assurance

The recently appointed government (2001) identified the private sector as central to business development and its economic policy management has the following aims:  Strengthen rural economy  Restore investor confidence

112

PENELOPE HOOD

 Revitalise business economy  Job creation in expanding sectors The government initiatives and policies to achieve these include the granting of fiscal incentives to revive investor confidence, the establishment of five economic zones to facilitate the flow of foreign investment, improving transport systems, removing bureaucratic controls that discourage investment, providing capital and training to promote enterprise development and rationalising labour laws. Clearly, there is a need to set a strategic direction and to declare a human resource training and development policy to raise awareness of management concepts such as motivation, leadership and commitment. Since being elected in 2001, the UNF government has tried to strike a balance between short and long/medium term components of economic recovery; however, it was not until 2002 that they were organised into a single coherent programme with defined priorities and a time frame. International initiatives include ‘a closer relationship with the regional superpower India as well as the global superpower, the United States’ (Institute of Policy Studies, 2002). A free-trade zone catering for Indian foreign investment is planned, negotiations are taking place to expand the India-Sri Lanka Free Trade Agreement, and a Trade and Investment Framework Agreement (TIFA) will provide a forum to expand bilateral trade and investment. The question to be asked is not merely how managers can act as agents of change to bring about the necessary development, but perhaps more importantly what is it that is preventing them from doing so. There is an absence of entrepreneurialism, particularly in the public sector, and high levels of resistance to change (Evans & Hood, 2000). Today’s businesses will not survive in a period of rapid change and innovation unless they acquire entrepreneurial competence. This need for ‘entrepreneurial management’ (Drucker, 2001) is echoed by Weerakkody (2003, p. 37) who suggests that the only way to meet the current challenges is to develop senior managers; they need ‘to be nimble and innovate at the firm level as well as the government level’. Such management behaviours are characterised by a need for achievement and risk taking (Hisrich & Peters, 2000) but are not associated with the collective culture, such as that of Sri Lanka (Hofstede, 2001). A dearth of research studies into Sri Lankan management indicates a lack of awareness of its significant role for the country’s economy. However, the few research projects that have been undertaken indicate a high degree of risk aversive management (Evans & Hood, 1998). A recent

Managing Development for Peace: Sri Lanka

113

survey on risk taking in both the public and private sector of Sri Lanka suggests that the higher the degree of risk taking, the more positive the influence on performance (Rajaratne, 2002), but this potential effect is diminished by cultural, social and organisational discouragement. The collectivist culture of Sri Lanka does not encourage individual achievement with open disapproval of assertive or competitive behaviours. The social group and group loyalty, and well being are more important than that of individuals. This has implications for individual target setting, performance management and staff appraisal (Hood, 2001). Frequently, deference to senior staff by more able junior staff results in little discussion or consultation; new ideas are seen as criticism of the status quo or as threatening to senior staff and demonstrate a lack of loyalty or commitment. In particular, in the public sector the political system does not encourage innovation or change – each successive change in political appointment results in new policies, resisted by staff since frequently before implementation the policies have been changed by a successive appointment. This is particularly evident in the education sector where resistance to the implementation of Education Reforms introduced in 1995 has resulted in little progress in the following 5 years. Ideas are outdated before being translated into action. There is a need to move from left hemisphere analytical thinking to more creative solutions, achieved by using left brain skills to harvest right brain ideas, converting innovative ideas into pragmatic business enterprises. Sri Lankan management is characterised by high involvement of senior managers in day to day issues, an absence of strategic thinking and policy making, with short to medium term planning as the norm. Managers must become leaders and agents of change through high involvement in strategy rather than acting as operational managers (Kamingo, 1998). It is perhaps relevant to the argument for professional development of CEOs that in the Board of Industry (BOI) out of 1,300 employees only 20 employees have Master’s degrees with no figures available as to numbers relating to management or business.

DEVELOPING AGENTS OF CHANGE Between February and August 2003, the author investigated the current state of MBA programmes in Sri Lanka. The six universities, which were the focus of the research (Colombo, Moratuwa, Peredeniya, Rahuna, Rajerata, Sri Jayewardenepura) are those Sri Lankan universities offering a general

114

PENELOPE HOOD

MBA part-time, with no distinction made between this programme and an executive MBA. All universities in the research sample taught the MBA programme through the medium of English. The research instruments were deployed to three separate constituencies, namely MBA students both past and present, employers of MBA students and members of university faculties engaged in teaching MBA programmes. The universities researched were limited to those in the public sector funded by the University Grants Commission. Since 2001, there have been an increasing number of private universities who have partnerships with UK, Canadian, US, Australian and Southeast Asian Universities and who offer a range of MBA degrees. These overseas offerings, partnership arrangements, the Open University or those universities offering MBA type degrees under another title were not included. Questionnaires were sent to all three of the above constituencies to elicit information relating to programme design and structure, student experience, programme development and quality assurance. Interviews were conducted with the Dean, MBA Co-ordinator, one male/female faculty member, one male/female current student, one male/female past student and two employers of students covering the same four areas as the questionnaire. Focus group discussions were held with 6–10 students who were opportunistically selected according to availability from four of the six universities. Documentary evidence was collected from all universities in the sample, including student manuals, module reference sheets, entrance examination results, MBA examination results, recruitment and retention statistics. This source of secondary data was synthesised with the findings from the primary data to present a coherent picture of what is going on in each university in respect of the creation and development of its MBA programme. Whilst a questionnaire seemed to be the most suitable method of gathering a broad canvas of data from all stakeholders, the author’s previous experience of conducting research in Sri Lanka had indicated potential problems in administering the questionnaire. There is a general reluctance, which is shared with other Asian cultures, to complete and return anonymous surveys or questionnaires. The fear that responses articulated in questionnaire returns may not always be treated in strict confidence or that they may be traced to the original source, seems to create high levels of anxiety. Sometimes return rates are disappointingly low, at other times responses are sanitised to such an extent that they add little value to the research.

Managing Development for Peace: Sri Lanka

115

To overcome such an eventuality a focus group schedule for six to ten students was designed. Thus, there emerged a consensus view in relation to key questions regarding the content and delivery of the programme, student motivation, programme weaknesses and strengths, facilitating factors and constraints and the potential benefits to organisations and to managers in their future careers. As anticipated, the questionnaire returns of both students and faculty staff from the sample of universities were generally very disappointing, with three universities returning a staff response of 0% and student responses ranging from 2 to 4%. Similarly, questionnaire responses from employers have not been given, since the low response (ranging from 0 to 2%) render them invalid for inclusion. However, the focus group discussions provided a wealth of information and made up for the dearth of evidence from the questionnaires caused by ethnocentric preconceptions as to appropriate research design (Kodithuuwakku, 2003). The date of the first MBA offering in each University ranged from 1984 to 2000, with 4 out of the 6 commencing their MBA programme within the previous 5 years. For all of the universities, the MBA programme was considered their top award with typical descriptions such as ‘cre`me de la cre`me’ and ‘our raison d’eˆtre’ given. Numbers of contributors to the MBA programme were similar, ranging from 20 to 35; the differences lay in the numbers of faculty staff and staff employed solely to teach on the MBA level. The average age of students was 34 years, with a range of 24–55 years. The percentage of female students expressed as a total of MBA students ranged from 20 to 33%. Student contact time varied only slightly, with the average contact time being 30 h per module. All programmes included occasional weekend delivery. Where sponsorship was high, (75%), this reflected government initiatives to address issues of underdevelopment. Sponsorship took many forms: total teaching costs, payment on completion, assistance with books, or travel and so on. Assessment covered a range of methods including quizzes, term tests, end of year exams, group presentations, case studies, home assignments, dissertations, project and executive/consultancy reports. The proportion of examination assessment ranged from 40% to 60%. In five out of the six Universities, a research component was compulsory; however, requirements as to empirical research work varied with a choice available between dissertation, project or report. The research component was highly valued by students and staff; although, in all of the universities, it was seen as a common cause of non-completion. Costs varied widely. Basic tuition fees

116

PENELOPE HOOD

varied between 70,000–178,000Rs (d1/circa 150 SL Rs) Start times were not rigidly fixed and were subject to change. At the time of the report, two programmes started in January, one in February, one in June, one in October and one in November. Programme timing seemed to be driven by staff resources rather than staff working to a fixed programme, this clearly gave rise to planning problems. Course content did not follow a regular pattern. Whilst all Universities offered options, all were in agreement that the availability of options might be dependant upon human resources and demand. Core subjects at all Universities provided a broad base of general business administration and management theory. All of the six universities researched expressed a wish to develop links with overseas universities with five out of the six offering lack of funds as a reason for not doing so. All of the Universities had potential international links through previously established contacts. Choice of University was governed by the following factors:        

Prestige Academic reputation/quality of teaching Specialism Ease of location/transport Student facilities Administration of programme Ease of selection Cost

The MBA programme was highly regarded by students, staff and employers. Even where critical of individual components of programmes, all interviewees considered the MBA as crucial to future employment progress; it is seen as an essential passport for progression and is becoming a Sri Lankan benchmark of advanced management skills. There is considerable disparity in the opinions expressed by students, employers and by staff. Staff expressed satisfaction with the programmes that were not matched by student or employer satisfaction. In some institutions, students were critical of programme administration, communication and absence of student facilities. Monitoring and evaluation of programmes was weak with frequent tokenism, targets for throughput are not set and issues contributing to failure rates were not identified. Evaluation was focussed on students and individual modules, rather than the total programme. There was an absence of analysis of the MBA offerings and a lost opportunity to improve the quality and quantity of outputs. There were no formal processes included in

Managing Development for Peace: Sri Lanka

117

any of the MBA programmes researched that encouraged further continuing professional development. The comparatively high withdrawal and low completion rates of MBA students is a waste of resources. Universities did not address these issues. There is a need for further research to be undertaken in this area and for measures to be put in place that would ameliorate the wastage. Whilst the conflicting pressures of work, family and MBA programme are given as the most likely reason for non-completion, it is the combination of this cluster, rather than a single factor, that is most likely to result in withdrawal. If programmes were designed with a greater degree of flexibility, augmented by appropriate student support, this may have a beneficial influence on outputs. Non-completion is most frequently the result of foreign employment, overseas studies, illness or difficulties with the research component of the programme. There is no correlation between ranking in the selection process, performance in the MBA programme and completion. The selection process does not predict MBA outcomes. Indeed, students who are ‘high flyers’ are more likely to be presented with opportunities to work abroad. An increased emphasis on the interview and discussion of future aspirations might result in the selection of a more stable student population. There is little formal interaction or communication between the six government universities delivering the MBA programme. However, there are many academics who teach on several of the MBA programmes provided by different universities. This lack of communication results in an isolationist approach to the delivery and benefits of collaboration; the sharing of expertise and economies of scale of delivery are lost. Whilst all Universities acknowledged the desirability of links with overseas Universities to widen the international base and gain greater credibility, in most cases this remains mere rhetoric. In the meantime, private institutions are forging partnerships with prestigious Universities, for example, in UK, Australia and Thailand. The critical link between practise and theory, between practitioners and academics, is not developed for the benefit of students. Students are often critical of academics who are perceived as being unrealistic and remote from the current concerns of managers today. MBA students believe that as senior or middle managers their status should be acknowledged through the provision of post-graduate facilities of a higher calibre than those currently provided. Areas for small group work, cafeteria facilities, water dispensers and a lounge area were most commonly cited as desirable. In some

118

PENELOPE HOOD

institutions, administration of programmes is weak with insufficient use made of information communication technology to the detriment of students. In the majority of the universities, notions of marketing and competition are weak. There is a danger that current market strengths may be lost unless considerable attention is paid to opportunities and threats. Advertising for students is ad hoc with no evidence of planned marketing strategies. Where one University advertised earlier than others in the local press, recruitment was said to improve. Information generally is not given to students until they have applied and submitted their application fees. Universities are not marketing to their strengths and are relying on local markets. The opportunities for accessing the internal university market are not exploited and no advertising is used to attract overseas students. Quality assurance is the least understood issue identified and attention to this area could achieve great advances in quality of programme. Data analysis, particularly of dropout rates, student satisfaction and examination results are areas to be developed. The need for more flexible access to teaching and learning might attract more students, resulting in a higher standard of student selection and reduce the dropout rate. Whilst local Sri Lankan providers are not threatened by outside competition at the present time, there is a danger of complacency. The provision of the MBA programme overseas and by local Universities no longer divides the market. The introduction of a Sri Lankan delivery of an international MBA is a fast growing possibility, which provides an attractive alternative for those students who value the prestige of an overseas university degree but are unable to commit themselves to a study period outside Sri Lanka. Current thinking suggests that there is a further relationship that could be exploited through the provision of an MBA programme in conjunction with professional body awards, such as the Marketing Institute, Chartered Institute of Accountants or the Law Society. If such partnerships enjoyed the added cachet of external overseas validation, the advantages would be greatly increased. There is marked disparity in the quality of offering of MBA programmes in Sri Lanka. However, this reflects inequity in allocation of resources and stage of programme development rather than the quality of potential programme provision. Until rigorous and consistent quality assurance processes are implemented, there can be no benchmarking for improvement. Whilst under considerable pressure, which diminishes creativity and innovation, staff generally is highly committed and motivated. The formation of an association of formal alliances could raise the standard of the MBA nation-wide and build upon the capacity to increase sustainability for the future.

Managing Development for Peace: Sri Lanka

119

BUILDING THE FUTURE In the Colombo area alone in 2003 (Research Data, 2003), over 300 MBA students are due to graduate; this is a growth area for universities. This figure does not include the numbers of students returning to Sri Lanka having studied for MBA programmes overseas. The demand far exceeds the numbers of students’ places available. Clearly, there are managers in the workplace who understand the concepts and techniques of management, but management is failing to address effectively the low productivity, high absenteeism and poor quality control that are preventing Sri Lanka from being competitive. In particular there is a very low take up of places by students who influence the development and reconstruction in the North, East and South. If the identified essential economic revolution is to take place, private and public companies need to be more dynamic. Similarly, the significant role of security and defence is an area, in which management skills can contribute to the peace process. Management development is seen essentially as the privilege of developed areas of Sri Lanka, rather than recognised as a serious absence and weakness in the underdeveloped regions. When the author interviewed CEOs during the MBA research, some of them were clear about the direction in which they wanted their enterprises to develop their human resources, but seemed unwilling to take risks and empower senior managers, to give responsibility to these potentially capable staff. This is a tragedy, since many of these senior managers are competent and resourceful and are denied the opportunity to develop. Furthermore, strategic management is neglected due to over involvement in operational management by CEOs and this has a domino effect throughout organisations and indeed in planning at a national level. There must be a breakthrough, so that a critical mass of trained professional managers are developed through MBA programmes; that talented managers are empowered to act and lead the way to a buoyant economic infrastructure as agents of change. There are some signs already that this is beginning to happen. Public companies are now being privatised as viable enterprises, for example, Sri Lankan Airlines and Sri Lanka Telecom. Sri Lanka Airlines has been revitalised by its partnership with Emirates Airlines over the past 3 years. Sri Lankan Airlines was a wholly owned government organisation until March 1998 when 40% of shares, together with management rights, were transferred to the Emirates Airline on 1 April 1998. Sri Lanka Telecom was the biggest flotation in the country’s history when a 12% stake in the fixed line monopoly was sold by

120

PENELOPE HOOD

the government in November 2002 for US $34 million as part of its extensive privatisation programme (www.bbc.co.uk (b)). Strategies for the transformation of organisations and businesses must be identified and implemented at all levels if they are to be effective. Government policies and initiatives for change will address fiscal issues and international policies essential to pave the way for business growth and expansion. However, only when the significance of management as a contributor to the national economy and the sustainable growth of Sri Lanka is realised will such efforts cease to be constrained in their effectiveness. Good management is necessary to implement change, to interpret policy and strategy and to translate these effectively at the organisational level. The public image of management influences the value ascribed to it by society and thus the financial rewards given to managers. The Sri Lankan public perception of management is of the ‘fat cat’, highly paid with little return in terms of commitment and ability. With few exceptions, and certainly throughout the public sector, managers are not well paid; however, it is true that many are in post through long service rather than ability. This must change. Recent correspondence in the national newspapers has generated a discussion as to the value of MBA programmes with criticism levelled at the relevance of such professional development. In defence, the author had published a commentary on the work of the Universities and their significant role in the future development of Sri Lanka. Until such criticisms are stilled, formal management training is likely to be seen as a ‘frill’ rather than as an essential qualification for effective managers. Public relations are an issue of importance for the government, the business world and also the Universities who will produce the managers of the future. The excellent work of post-graduate faculties and Business Schools offering the MBA programme needs to be brought to the notice of the general public. For example, the National Human Resource Management Awards, partly sponsored by one of the Sri Lankan providers of the MBA (The Post Graduate Institute of Management, Sri Jayewardenepura University) were instrumental in raising awareness of the HRM issues for small and mediumsized enterprises as well as large organisations. The introduction of similar management awards at the regional and national level could be helpful in raising the profile of the management. A policy of management training programmes for potentially able but unqualified staff could provide access to management development for those individuals who are not able to self-finance study at a higher level and provide a management career structure. Other initiatives to promote

Managing Development for Peace: Sri Lanka

121

management might include the sponsorship of management trainees in both the public and private sector supported by in-house management programmes, validated by recognised bodies such as the Sri Lankan Institute of Marketing and the Institute of Personnel Management. Recognition that the development of flexible transferable skills of employees generates long-term benefits for the economy rather than a short-term approach, which merely equips workers with a narrow range of task specific skills, will support the necessary investment in human resources. Effective monitoring and evaluation of MBA programmes by Universities to ensure relevance and quality is essential. Rigour can be ensured by the demands of the University Grants Commission establishing clear benchmarks. Government funding in the form of sponsorship is already available for those MBA students in seven areas identified as being underdeveloped and affected by war in the North, East and South. Access to Universities for these students is very limited, as is information about the scheme. Improved communication would increase access for students. Similarly, the creation of a more positive image of management through appropriate government initiatives and media coverage will require effective communication. The encouragement of collaborative relationships between existing practitioners and those delivering management development programmes is essential if theory and practise are to be integrated and greater emphasis on establishing such links can contribute towards the creation of a positive public image of management. The creation of a business culture that encourages innovation and creativity will take a long time. However, the experience of other collectivist cultures that has been successful in achieving high productivity, innovation and changes in response to global demands, for example Japan, could identify possible ways of addressing these issues in Sri Lanka. Research into management issues, particularly those relating to quality assurance, performance management, staff development and motivation should be encouraged at all levels in order to gain greater understanding of Sri Lankan specific contexts. Rationalisation of the many initiatives through a coherent overview would reduce the duplication and dissipation of energies. The US $4.3 billion donor funding could be used to enable Sri Lanka to achieve its inherent potential as identified in 1948: that of a country with the capacity to take an active role in the global market place. Unless there is an integration of initiatives, there is great danger that this money will be squandered and lost in individual projects that are unrelated to the vision of Sri Lanka regained (RSL). ‘Joined up thinking’ with continuous monitoring and

122

PENELOPE HOOD

evaluation, supported by good management development in a country free from ethnic conflict, will enable these resources to achieve the desired effect. Particularly, these must be centred on the North, East and South.

POSTSCRIPT In November 2003, the President of Sri Lanka took over the Ministries of Defence, Interior and Media and prorogued Parliament for 2 weeks. The statement by the President’s Office, (4th November, 2003) that ‘This step has been taken after careful consideration, in order to prevent further deterioration of the security situation of the country’ was responded to by the Prime Minister who stated ‘The firing of three cabinet ministers and suspension of Parliament by President Kumaratunga could lead the country into chaosy [he] would not allow the President’s moves to undermine the peace process and economic prosperity’. This state of tension caused subsequent losses of millions of rupees on the Sri Lankan Stock Exchange, contrary to the optimism previously demonstrated by record rises in foreign investment recorded in September 2003 (Daily News, 6 September 2003) with a threefold increase in Foreign Direct Investment (FDI) inflows from US $82 million (2001) to US $242 million. The Norwegian peace negotiators have subsequently withdrawn their presence until such time as a resolution is reached; with serious implications for the funding previously allocated to Sri Lanka. The Government and the President have failed to reach a compromise solution to break the deadlock. The Prime Minister proposed that the President retain the defence portfolio with all defence issues decided by the National Security council chaired by the President, pointing out that he could not take responsibility for the peace process ‘without control of the defence levers’, (Sunday Leader, 14 December, 2003). Talks held on 11 December 2003 have not been successful. The LTTE has informed the Tamil National Alliance that the peace talks are on hold until the defence issue is resolved and that it is likely now there will be elections.

REFERENCES Airbus Industries, Quarterly Report. (2001). Belgamage, J. (2003, July). In pursuit of a mirage? LMD (Lanka Management Digest: The Voice of Business), 9(2).

Managing Development for Peace: Sri Lanka

123

Census Office Central. (2001). Census Office of Sri Lanka. Department of Government Printing: Colombo. Daily News. (2003, 6 September). Colombo: Sri Lanka. Drucker, P. (1995). People and performance. Oxford: Butterworth Heinemann. Drucker, P. (2001). Management challenges for the 21st century. Oxford: Butterworth Heinemann. Dunphy, D. T. (1999). Religion and ethnicity in the Sri Lankan Civil War. In: Creating peace in Sri Lanka, Civil War and reconciliation. Washington: World Peace Foundation/ Brookings Institution Press. Evans, D. W. & Hood, P. J. (1998). Transformational leadership and organisational change: Releasing the energies of the people. Conference paper delivered at The Business Leaders Forum, The Postgraduate Institute of Management, Sri Jayewardenepura University, Sri Lanka. Evans, D. W., Hood, P. J., & Perera, W. J. (2000). A critical analysis of school leadership and staff empowerment in two different cultural settings to test Generic Management Dimensions. Sri Lankan Journal of Management, 5 (1, 2) [PIM: Colombo], 48–62. Hisrich, R. D., & Peters, M. P. (2000). Entrepreneurship (4th ed.). New York: McGraw Hill. Hofstede, G. (2001). Culture’s consequences (2nd ed.). Sage: London. Hood, P. J. (2001). Human resource development: A model of motivation and movement. Sri Lankan Journal of Management, 5(1,2) [PIM: Colombo], 26–41. Hood, P. J. (2002, February). Motivation and movement. Organisations and People 9(1) [London], 26–41. Hood, P. J. (2003, August). Meeting emotional needs. Organisations and People, 10 (3) [London], 29–38. Institute of Policy Studies. (2002). Sri Lanka: State of the Economy, 2002. Institute of Policy Studies: Colombo. Kamingo, R. N. (1998). Entrepreneurship and innovation: Models for development. Delhi: Sage. Kodithuwakku, K. (2003). Future needs and Sri Lanka. Speech given at the Sri Lankan Economic Association Annual Conference, July 2003. Koshy, D. O. (1999). Garment Exports. New Delhi: Prentice Hall. Paignier, M. (2003). The Island. United Newspapers, July 14, Colombo. Peiris, G. (1999). Insurrection and youth unrest in Sri Lanka. In: History & Politics: Millennial perspectives. Essays in honour of de Silva K. Colombo: Law and Society Trust. Rajaratne, M. (2002). Entrepreneurial characteristics in Sri Lankan managers. Unpublished MBA Dissertation, Postgraduate Institute of Management, Sri Jayewardenepura University: Colombo. Rotbert, R. (1998). Creating peace in Sri Lanka, civil war and reconciliation. Washington: World Peace Foundation/Brookings Institution Press. Sri Lankan Exporter. (2003). Sri Lankan Exporter, 41(March–May) [Colombo]. Sunday Leader. (2003, 14 December). Colombo: Sri Lanka. USAID. (2002). Sri Lanka: US Agency for International Development, Washington. US Department of Commerce. (2002). AGOA report to Congress, US Department of Commerce. Weerakkody, D. (2003). Investing in the future. Business Today, 8(2). Wickramasinghe, R. (2003a). Regaining Sri Lanka: Vision and strategy for accelerated development (RSL). Government Policy Document, April 2003, Government Publications: Colombo. Wickramasinghe, R. (2003b). Opening Address, Tokyo Conference, 9th June 2003.

124

PENELOPE HOOD

www.accu.or.jp. http://www/accu/or.jp/ltdbase/policy/lka. UNESCO: Literacy facts and figures in Asia and the Pacific, Institute of Statistics, UNESCO, 2002 (accessed 30th July 2003). www.bbc.co.uk (a). http://www.news.bbc.co.uk/1/hi/world/south_asia/2977230 (accessed 20th July, 2003). www.bbc.co.uk (b). http://news.bbc.co.uk/2/hi/business/2656397.stm (accessed 1st August, 2003). www.bbc.co.uk (c). http://www.news.bbc.co.uk/1/hi/business/1456417.stm (accessed 16th July, 2003).

ETHNIC CONFLICT IN SRI LANKA: THE DILEMMA OF BUILDING A UNITARY STATE A. R. M. Imtiyaz INTRODUCTION The tsunami that swept the shores of Sri Lanka on December 26, 2004, killed over 30,000 people regardless of their ethnic or religious affiliations. This article deals with a different conflict – one fashioned by human beings, which has caused the loss of an estimated 70,000 lives. The vast majority of the lives lost have been from the minority Tamil population. The basic argument of this article is that the desire to uphold a unitary state in Sri Lanka established by the British colonial rulers in 1833 has really been the desire to establish Sinhala hegemony over the minorities, particularly the Tamil minority. The ethnic composition of Sri Lanka is about 74% Sinhalese, most of whom are Buddhists; 18% Tamils, most of whom are Hindu; and 7% Muslim who follow Islam, with the rest belonging to other smaller groups. Policies employed by the politicians of the Sinhalese in the post independent Sri Lanka, formerly known as Ceylon, have been largely ethnocentric and have favored the Sinhalese. The Tamils believe that policies such as the Citizenship Act of 1948 and the Sinhala Only Official Language Act of 1956, formulated by the Sinhala leaders and aimed at consolidating the current

Conflict and Peace in South Asia Contributions to Conflict Management, Peace Economics and Development, Volume 5, 125–147 Copyright r 2008 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1572-8323/doi:10.1016/S1572-8323(08)05009-1

125

126

A. R. M. IMTIYAZ

unitary state structure, effectively ignored the needs of their community. Prominent Sri Lankan scholars such as Dharmadasa (1992), Jayewardene and Uyangoda (1986, pp. 1–47), Rajanayagam (1986, pp. 63–85), and Wickeremeratne (1995) record the Tamil frustrations and explain the motives of the Sinhala political class to formulate such ethnocentric policies. Modernization processes in ethnically divided societies often bring about conflict between the different groups. Politicization of ethnic differences in favor of a particular ethnic group could marginalize another, and thus such marginalization can erode the trust of the marginalized in the state and its institutions. In Sri Lanka, since independence the Sinhalese politicians and leaders formulated the policies to strengthen the unitary state structure, a kind of political symbol of the Sinhalese. Sinhalese considered such policies and actions as formulated to suit their needs. Many Sinhalese, as Mahavamsa1 advocates, believe that the entire island is the sacred home of the Sinhalese and Buddhism and thus oppose power-sharing with the Tamils that fundamentally goes beyond the current form of unitary structure. All this, however, effectively eroded Tamil trust in the fair delivery of state and its institutions. As a result, the conflict gathers momentum in the direction of ‘‘independence’’ or ‘‘separation’’ in some form.

The Origins of the Unitary State Structure Three regional sovereignties existed in the country when the Portuguese, the first of the Western colonialists, arrived on the shores of Ceylon in 1505. One of these was the independent Tamil Kingdom located on the northern Jaffna peninsula of the same name. Two were Sinhalese with their capitals at Kotte, and Kandy in the central hill country. The northern Tamil Kingdom had been in existence since the early thirteenth century (Arasaratnam, 1964, p. 10). By the middle of the fourteenth century, according to de Silva (1981, p. 85), ‘‘the Jaffna Kingdom had effective control over the northwest coast up to Puttalam, over the next two decades, they probed into the Matale district, and naval forces were dispatched to the west coast as far south as Panadura. They seemed poised for the establishment of Tamil supremacy over Sri Lanka.’’ During this period, more or less three kingdoms had functioned independently. However, Jaffna’s single sovereign authority came under fire when Parakramabahu VI, the Sinhalese King of what came to be called the Kotte Kingdom, was confronted with a dual threat from what Sinhalese scholars call ‘‘adversaries of the Sinhalese’’ and eventually

Ethnic Conflict in Sri Lanka

127

subjugated it (ibid., p. 7). By the middle of the fifteenth century, the Jaffna Kingdom was under Sinhalese rule. Parakramabahu VI crowned Sapumal Kumaraya, his adopted son, to the throne in Jaffna. As it happened so often in Sinhalese Kingdom’s history, dispute over succession followed the death of Parakramabahu VI and shattered all his long-term aims. The first benefit went to the northerners. That is to say, Jaffna successfully re-established itself as an independent Kingdom under Pararajasekaram (1479–1519) then developed its own confident Hindu culture. The history of the sovereignty of the Tamil Kingdom ended when the Portuguese defeated Cankili II, the last Tamil King, in battle and formally annexed the Jaffna Kingdom in 1619. After the Portuguese influence left the island, the Dutch replaced the Portuguese-occupied places until their departure. Although the Portuguese and Dutch controlled the Jaffna, their primary interest was trade. They only concentrated their resources on maintaining secure control of strategic maritime points on the coastline of Sri Lanka. In other words, they did not introduce any major changes that brought the minority Tamil-dominated Jaffna Kingdom under the rest of the control of their region. The task of bringing the island under a single centralized administration was left to the British, who displaced the Dutch in the last years of the eighteenth century and ruled the island until their voluntary departure in 1948. In fact, the British shared very little concern over the island itself. They appear to have regarded the eastern port of Trincomalee, which is one of the world’s finest natural seaports, to be of strategic value for their vast possessions on the mainland. However, with the rapid transition from mercantile to industrial capitalism in Britain during the early nineteenth century, the British decided to establish a direct economic stake in Sri Lanka (Bose, 1994, p. 7). In particular, they now required plantation products in large quantities, both as raw material and as consumer goods. The establishment of the plantation economy (initially in coffee and later in tea, rubber, and coconut) would not be possible without the conquering of the majority of the Sinhalese-dominated Kandyan Kingdom, which was the only strong local Kingdom resolutely holding out against colonial penetration for the last three centuries. However, after a series of military campaigns against the powerful Kandyans guerilla attacks from 1815 to 1818, the British finally conquered the Kandyan Kingdom. In 1831 after the British overcame the Dutch, the Colebrook–Cameron Commission introduced a more liberal form of government than had been operative prior to 1833. Their reforms proposed the administrative unification of the entire island. This proposal was made for the introduction of a modern administrative system; but the country was made into a highly

128

A. R. M. IMTIYAZ

centralized unitary state. Obviously, the Jaffna-centered Tamil Kingdom was neither consulted by the British nor offered an alternative powersharing with the Sinhalese. The constitutional reforms or new set of constitutions introduced by the British since 1833 such as the Constitutions of 1924, 1931,2 and 19473 paid no attention to introduce the federal form of state structure; they refined the unitary structure instead. Thus, it can be argued that this was a principal root cause of the vast political problems in the second half of the twentieth century.

The Consolidation of the Unitary State The Sinhalese leaders who led the island soon after independence were aware of the Sinhalese desire for the unified country; thus, they did not dare to reform the British-introduced political system. Instead, they took initial steps to consolidate the unitary state structure. During the first phase of the consolidation of a unitary state structure after independence (1948–1956), Newton Gunasinghe (1984, p. 56) notes, ‘‘Sri Lanka was governed by a social stratum representing landed and commercial interests. This elite was economically and socially a product of British colonialismyalthough competitionyand rivalry took place within the ruling elite on the basis of these parochial loyalties, the political pressure from the people kept them sufficiently united.’’ However, the year of 1956 marked a significant change. Leadership struggles within the United National Party (UNP), which had ruled the country from 1948 to 1956, were cases in point. Solomon Bandaranaike, a senior UNP politician and Minister of Local Government between 1936 and 1951, was heir apparent to the Prime Minister, the aged Don Stephen Senanayake, the first Prime Minister of independent Sri Lanka (and the chief negotiator for Sri Lanka with the British over the independence issue). However, his intentions were thwarted when Don Stephen named his son Dudley as his successor in office. This surprising decision encouraged Bandaranaike to quit the UNP and form his own party in 1951, the Sri Lanka Freedom Party (SLFP). In the second general elections of 1952, the SLFP returned to the Parliament with 9 seats while the UNP had 54. The SLFP’s defeat in their first elections did not symbolize their failure in politics; instead, they organized themselves. Most importantly, the SLFP employed pro-Sinhalese policies to politicize the ethnic relations. To make sure its agendas worked, the SLFP, correctly founded its base among the Sinhalese, which UNP and other left-wing parties had failed to target.

Ethnic Conflict in Sri Lanka

129

Bandaranaike appealed to systematically mobilize a much more heterogeneous bloc than the UNP had ever focused on. The SLFP successfully gathered into its fold Sinhalese urban entrepreneurs, the rural pettybourgeoisie of the South, Sinhalese school teachers, village physicians, notaries, and village monks (Gunasinghe, 1989, p. 244). These groups were less privileged and had nothing to lose by supporting the SLFP. They also thought that the policies the UNP made were pro-rich, and thus they branded them as pro-West. They also felt that the Tamil community had taken an unfair share of power during the British Colonial administration by profiting from opportunities for an English education, which was available to them. It was a crucial time. In this situation, only the language issue was a coherent and easily understandable political slogan. It served as a focal issue that united the Sinhalese community. In 1955, Sir John Kotelawela paid an official visit to the Tamil predominantly northern districts. He made a public statement that he would enact constitutional provisions for parity of status for the Sinhalese and Tamil languages. Bandaranaike, a skilled politician, found this (UNP) pronouncement an easy bait to gather the Sinhalese support to outbid the UNP. Such persons had little hesitation in rejecting Kotelawela’s language policy. They were convinced by the Sinhala elites that (Jaffna) Tamils had always occupied the better position in government service because of their English educational background. Consequently, the SLFP stood on a singlefocus platform, neatly encapsulated in two words – ‘‘Sinhala Only.’’ Moreover, the SLFP promised to replace English with Sinhalese in 24 h, if they were elected. In contrast, India announced plans to replace English with Hindi within 20 years (Mahumud Ali, 1993, p. 217). Attacking the neo-colonial system, Bandaranaike alleged that 90% of the government employment went to the privileged English-speaking minority, which constituted less than 10% of the total population. As Nithiyanandan rightly observed (1987, p. 111), ‘‘the conflict that manifested itself in the runup to the 1956 polls was not so much between ethnic communities (such as Tamils and Sinhalese), as between two classes of society.’’ It must be stated that the westernized, English-speaking comprador class, considered overprivileged, was consolidated almost exclusively in Colombo. It contained both Sinhalese and Tamils. Bandaranaike’s strategy was therefore to focus on language rather than race – not English but Sinhalese as the only official language. The implication of the ‘‘Official Language Act’’ administered by the majority Sinhalese-ruling sector was to foster communal politics and to consolidate a unitary structure of government. On the one hand, this

130

A. R. M. IMTIYAZ

situation resulted in dividing the Sinhalese community in terms of those with access to English education (a minority) and those without (a majority, mostly residing in villages). On the other hand, it divided the Sri Lankan Tamils in terms of their language (Tamil) and the only official language that was legislated. The actual situation on the ground was that since the nineteenth century, thanks to the services of the American missionary societies in northern Sri Lanka, large numbers of Tamils in Jaffna enjoyed the opportunity of an education in the English medium. These included those of the lower middle class as well. Kearney (1967, p. 137) writes: ‘‘The Jaffna Tamils have enjoyed superior educational and occupational opportunities and political as well as business, professional and intellectual leadership y’’ When the State called for employment in the public sector, because of their education in the English medium, the Tamils from Jaffna were selected. These included those from the lower middle classes as well. Among the Sinhalese, only those who were from the wealthier classes had the opportunity to receive an education in the English medium. The ‘‘Sinhala Only’’ policy of the Bandaranaike government, though it was primarily an anti-English issue, developed into an anti-Tamil issue in the minds of the poor Sinhalese. The ethnic group that had access to better employment, due to their superior access to an education in the English medium, was the minority Tamils. Consequently, the ‘‘Sinhala Only’’ policy was opposed by the Tamil politicians of Sri Lanka, especially those belonging to the Federal Party (FP) and the leftists (Nithiyanandan, 1987, p. 114). In 1944 as Minister of Local Government in the UNP government, Bandaranaike had been one of the first politicians to state that he saw no harm in recognizing Tamil also as an official language (Wilson, 1988, p. 40). Why then did he change course in the 1950s – Sinhala Only and not both Sinhala and Tamil? First, and perhaps most importantly, by imposing the Sinhala language on the people, whether ethnically Sinhalese or not, the attempt was to establish a unique culture based on a single language, thus strengthening the unitary state in Sri Lanka. On the other hand, the Tamil perception was and is that the Sinhala language was instrumental in oppressing the minorities. Secondly, there was the fact that in the Westminster-style legislative and political system inherited from the British, election depends on the number of votes that one can muster. Bandaranaike dreamt of being hailed as a great Sinhalese politician who spearheaded the cause of the oppressed Sinhalese and who in fact constituted the majority of the electorate.

Ethnic Conflict in Sri Lanka

131

As far as the minority Tamils were concerned, this policy disrupted their everyday life. First, they feared that the Sinhala language as the only official language would cause problems in carrying out the functions of their employment and hinder their prospects of promotion to higher office. Secondly, they were convinced that implementation of the Sinhala Only Act would eventually result in their fundamental rights being curtailed. Thirdly, as Chattopadhaya (1994, p. 52) notes, it sparked the first communal riots between the Sinhalese and Tamils. While the bill was being debated in Parliament, there was serious communal rioting in Colombo and the eastern province. On June 5, disturbances occurred at Colombo as about 200 Tamils led by 12 members of Parliament staged a silent protest demonstration outside the Parliament building. They were assaulted, even stoned, by Sinhalese mobs hired by the Sinhalese politicians. Rioting then spread throughout the city with many Tamils being assaulted and some shops of both Sri Lankan and Indian Tamils being looted. In order to placate the Tamils, Bandaranaike attempted to reach a compromise with Tamil leaders, who were growing increasingly hostile to the Sinhalese leadership. He took constructive steps of signing an agreement with the FP leader Chelvanayakam on July 26, 1957 known as the Bandaranaike-Chelvanayakam Pact (B–C Pact). The pact opened the way for a wide-ranging decentralization of administration and devolution of powers to the Tamil areas of the north and east. It proposed that the Tamil Northern Province would constitute a single regional authority, while the predominantly Tamil but demographically more complex Eastern province would be divided into two or more such units. However, all these units would be free to amalgamate if they so desired. Moreover, it was agreed that Parliament would devolve all powers to the regional bodies on the following subjects: agriculture, cooperatives, lands and land development, colonization, education, health, industries, fisheries, housing and social services, electricity, irrigation schemes, and roads (Wilson, 1994, pp. 10–25). Most important of all, the pact stipulated that Tamil should be used as the official language for all administrative work in the Northern and Eastern provinces. Bandaranaike defended the B–C Pact in Parliament (Ponnambalam, 1983, pp. 254–255): ‘‘ywe cannot decide these issues on grounds of extremismynaturally, Tamils will have the right to go up to the very summit of education in that mediumythe Tamil medium should also be used in examinationsy’’ The B–C Pact represented a wide-ranging and comprehensive devolution of power to alleviate ethnic tensions. It also had the seed of a possible

132

A. R. M. IMTIYAZ

federal solution in the long term. When the terms of the pact were made public, there was a storm of protest, mainly from Sinhala extremists of Bandaranaike’s own camp and the UNP, who were in the opposition. Significantly, the UNP found an ideal opportunity to gain political mileage from the issue by striving for the popularity they had lost among the Sinhalese (de Silva, 1981, p. 514). A senior UNP politician, Junius Richard Jayewardene (who would later be Executive President of Sri Lanka from 1977 to 1988) organized and successfully led a ‘‘peace march’’ to Kandy making his way through the Sinhalese heartland. His intention was to put pressure on Prime Minister Bandaranaike to abrogate the peace pact he had entered into with the FP leader (Kearney, 1985, pp. 898–917). In the mean time, a group of bhikkus4 staged a Satyagraha5 on the lawn of Bandaranaike’s private residence in Colombo to demand immediate abrogation of the pact. Tragically, to assuage the growing opposition to the pact Bandaranaike abrogated it in April 1958. The FP, for its part, denounced the surprise abrogation. They organized a series of nonviolent antigovernment campaigns in the north and east. The FP’s nonviolent campaign evoked violent reactions from the Sinhalese against the Tamils. In May–June 1958, there were major anti-Tamil riots throughout the island, particularly in the Sinhalese-dominated areas of the South. Hundreds of Tamils died and over 12,000 were made homeless (Bose, 1994, p. 62). The point is that Sinhalese politicians opted for retaining the island’s unitary state structure; and their political powers lost an excellent opportunity by rejecting Bandaranaike’s semi-federal solution. That solution represented an attempt to respond to Tamil grievances that had piled up with the implementation of unitary constitutions since 1833. There was another attempt to deal with the ethnic problem in 1965. This time the UNP took the initiative and negotiated a pact based on the previous Bandaranaike–Chelvanayakam Pact of 1957. The UNP Prime Minister Dudley Senanayake and the FP leader Chelvanayakam worked out the new pact. It proposed a moderate degree of devolution of power through the mechanism of district councils in the Tamil areas. In the granting of land under colonization schemes, the following priorities were to be observed in the Northern and Eastern provinces: Land in the two provinces was to be granted, first, to landless persons in the district concerned; secondly, to Tamil-speaking persons resident in the Northern and Eastern provinces; and thirdly, to other citizens of Sri Lanka, preference given to Tamil residents in the rest of the island (Ponnambalam, 1983, pp. 257–258). Regrettably, this pact suffered the same fate as that of 1957. This time the SLFP and left-wing parties were in opposition. Unable to withstand the pressure, the UNP

Ethnic Conflict in Sri Lanka

133

yielded to the ‘‘competitive chauvinism’’ of the Sinhalese. The bill was withdrawn. Donald Horowitz has suggested the reasons behind the breakdown of the agreement: Most important were UNP electoral concerns. Following the 1965 elections, the SLFP had moved back to an anti-Tamil line, portraying the UNP as a party manipulated by the federalists. The district council issue provided a focus for such attacks, spurred by Buddhist monks. Some UNP backbenchers, fearful of the consequences – for the government would have to go to the polls by 1970 – were on the verge of revolt. In the end, the UNP leadership withdrew the billy the party had not yet faced an election with the Federal Party millstone around its neck and did not know how much it weighed. (1985, p. 390)

Despite the fact that the major Sinhalese parties did not like to seek a solution based on political autonomy or federal formula, the FP, the chief Tamil moderate political party in the mainstream, had continued to be committed to a comprehensive political solution to the ethnic conflict within the frame work of a ‘‘united Sri Lanka.’’ As Wilson notes (1988, pp. 85–86), the FP strongly desired ‘‘comprehensive solution without jeopardizing the unity of Sri Lanka.’’ However, the Sinhalese ignored the willingness of the Tamils to live in the united island. For the (majority) Sinhalese, the constitution that enabled the unitary state structure psychologically benefited the Sinhala mentality, which has its roots in Mahavamsa, a fifth-century Sinhalese historical text. Also, ordinary Sinhalese who hailed from villages thought that the unitary constitution would liberate their lives from poverty. For the (minority) Tamils, this situation represented state oppression. On the other hand, the ruling Sinhalese elite attempted resolutely to consolidate a unitary state structure. Muslims openly supported the unitary state structure to consolidate their commercial interests. Since independence, Muslims in Sri Lanka often cooperated with the Sinhalese leaderships regardless of who occupied the powers in Colombo. The key reason for the Muslims’ good relations with the Sinhalese political class, apart from the commercial interests, was a fear for physical security or protection in the island. Muslim leaders were well aware that their community would face the risk of attitudes becoming unfriendly from the Sinhalese leaders by denying state support for business activities and possibly would face violent opposition as the Tamils had met in the early independence period. Such fear and the Muslim elite’s deep commercial aspirations made the Muslim political establishment, dominated by the Southern Muslims, seek an accommodative approach and support the unitary state structure. The Muslim decision for accommodation with the Sinhalese carried two immediate outcomes: (1) ministerial portfolios and

134

A. R. M. IMTIYAZ

concessions and (2) revival of Tamil animosity against the Muslims, particularly north and east Muslims. The year 1970 was a turning point in regard to attempts at consolidating the unitary structure of the state. That year the SLFP was returned to power with its traditional allies of the Left comprising the Lanka Sama Samaja Party (LSSP) and the Communist Party (CP).6 In 1972, Sirimavo Bandaranaike, the SLFP Prime Minister and widow of the late S.W.R.D. Bandaranaike, promulgated a new Republican Constitution (generally referred to as the First Republican Constitution) replacing the Soulbury Constitution, which had been crafted by the British and had been in operation since 1947. The new constitution was master-minded by Colvin R. de Silva who was a veteran LSSP socialist. Previously, he had been a vocal champion of Tamil rights. But the Constitution of 1972, which legalized the unitary state structure, effectively strengthened the unitary nature of Sri Lanka’s state structure by shelving some basic power-sharing arrangements adopted in the British-introduced Soulbury Constitution: Article 29 (2) of the Soulbury Constitution barred the Ceylon Parliament from enacting discriminatory legislation against a particular ethnic or religious group. The government led by Mrs. Bandaranaike repealed the protection in the 1972 Constitution of the Democratic Socialist Republic of Sri Lanka and included articles entrenching a foremost place and state patronage for Buddhism. Moreover, the 1972 Constitution reaffirmed the preeminence of the Sinhalese language in all aspects of public life. In other words, the new constitution eliminated the entrenched clause protecting the minorities from discrimination that was incorporated into the Soulbury Constitution of 1947. The new constitution played no role in generating the Tamil trust toward the state and its institutions. Thus, it may be interpreted that it was created by the Sinhala people, for the Sinhala people, who had effectively marginalized the other communities in the island. On the other hand, the FP was not successful in persuading center-left government led by Mrs. Bandaranaike to restructure Sri Lanka’s state structure (Oberst, 1988, pp. 1–20). Consequently, the First Republican Constitution of 1972, which opened the road to consolidation and enshrined the unitary state structure, came to be described by the Tamil community as a ‘‘charter of Sinhalese Buddhist supremacy.’’ In 1975, S. J. V. Chelvanayakam, leader of the FP, mirrored the common Tamil mood: It is a regrettable fact that successive Sinhalese Governments have used the power that flows from independence to deny us our fundamental rights and reduce us to the position of a subject peopleyI wish to announce to my people and to the country that I consider

Ethnic Conflict in Sri Lanka

135

that ythe Tamil Eelam nation should exercise the sovereignty already vested in the Tamil people and become free. (Wilson, 1988, p. 88)

In May 1976, shortly before he died, Chelvanayakam presided over the first convention held in the town of Pannakam in the northern Jaffna peninsula of the Tamil United Liberation Front (TULF), an umbrellagroup consisting of the FP; the All Ceylon Tamil Congress (ACTC); and the Ceylon Workers’ Congress (CWC), an organization representing the plantation Tamils. This convention openly declared that ‘‘the restoration and reconstitution of the Free, Sovereign, Secular, Socialist State of Tamil Eelam based on the right of self-determination inherent in every nation has become inevitable in order to safeguard the very existence of the Tamil nation in this country’’ (Wilson, 1988, pp. 85–86). The CWC, however, dissociated itself from this stand. Their decision to withdraw was due to the fact that the vast majority of the constituency of the CWC (the plantation Tamil workers) lived outside the north and east, the territory of the proposed Tamil State. However, the response of the state, and its institution controlled by the Sinhalese community, to the Tamil moderates was not positive, and the UNP led by J. R. Jayewardene promulgated a new constitution in 1978, which further strengthened the unitary state structure and created a special place in the constitution for the Buddhist religion and the Sinhala language (Oberst, 1988, pp. 1–20). Even at this stage, the moderate Tamil reaction did not support violence or what the government termed terrorism. But Tamil youths could not be contained. Their prospects for higher education and employment were hindered, mainly because of the standardization policy.7 Increasingly, they lost their patience with the slow process of ‘‘Parliamentary Democracy’’ and the inadequacy of the solutions offered. As antigovernment sentiment increased, the concept of peaceful protest or nonviolent mobilization against the Sinhala state lost its legitimacy. Tamil youths lost their trust in the state and its institutions and thus initiated violence in the form of organized armed resistance to symbols of state authority in the Jaffna peninsula. In other words, consolidation of the unitary state structure at the expense of Tamil interests radicalized a section of the Tamil youths and pressured the youths to adopt some form of violence. After the 1977 ethnic violence against the Tamils in Jaffna,8 violent Tamil movements increased their base among the Tamil youths as Tamil trust eroded in the impartial delivery of the state and its institutions dominated by the Sinhalese. Tamil youths did not think that they would obtain justice

136

A. R. M. IMTIYAZ

from the political establishments of the Sinhalese or that the Sinhalese leaders would seek political accommodation beyond the unitary state structure. Such belief among the Tamils, particularly Tamil youths, gave birth to some violent movements, particularly the LTTE, toward the end of the 1970s (De Votta, 2004, p. 15). The notable development in the early phase of violent Tamil movements was that these movements, while challenging the Sinhalese-dominated security forces in the Tamil-dominated north and east, instigated attacks against Tamil officers and civil servants attached to government institutions, including the security apparatus. Increasing Tamil violence in the north and east alerted the government led by J. R. Jayewardene. Thus, the government raised military activities against the Tamils, particularly the Tamil violent movements, and gained some success. On July 23, 1983, 13 Sri Lankan soldiers became victims of a landmine when their truck hit one on Palaly road in Thirunelvely. The following day, security forces swiftly reacted to revenge the killings of their colleagues by killing 41 people in Jaffna. The violence quickly spread to Colombo and other parts of the island in which ‘‘many neighborhoods were destroyed and nearly 100,000 Tamils in Colombo were displaced. Evidence suggested government collusion in the riots’’ (Becker, 2006, p. 6). An interview with J. R. Jayewardene exposed the state’s complicity in the violence against the Tamils: I am not worried about the opinion of the Jaffna (Tamil) people now. Now we cannot think of them. Not about their lives or of their opinion about us. The more you put pressure in the north, the happier the Sinhala people will be herey really, if I starve the Tamils, Sinhala people will be happyy . (Daily Telegraph, 1983)

The government neither condemned the violence that killed approximately 2,000 Tamils nor took any meaningful measures to punish the perpetrators of the violence. Instead, J. R. Jayewardene, President of Sri Lanka, praised the mobs as heroes of the Sinhalese people (Imtiyaz & Stavis, in press). However, Mrs. Indira Gandhi, Premier of India, issued the first public statement of concern for the Tamils. Communal violence in Sri Lanka against the Tamils, according to Kearney, ‘‘undoubtedly widened the gulf between the communities and heightened the Tamil sense of grievance and victimization’’ (1985, pp. 257–263). Also, it left the Tamils without hope and further isolated them from mainstream politics. The political developments since 1983 did not convince Tamils that politicians in southern Sri Lanka would reform the state structure in Sri Lanka to accommodate reasonable aspirations of the minorities, particularly the Tamils.

Ethnic Conflict in Sri Lanka

137

In late 1985 – after the failure of India-mediated peace talks between the government and combined Tamil militants, and the TULF in Thimbu, Bhutan during the summer of 19859 – the Sri Lanka government began to explore possibilities of sharing power with the Tamils without compromising the foundations of the unitary state structure. Growth of the violent Tamil campaign led primarily by the LTTE and pressure from the global community, particularly India, was the key factor behind government moves, which eventually culminated in the Indo-Lanka Accord of 1987 and the Thirteenth Amendment to the Constitution of Sri Lanka in November 1987.10 Although the agreement attempted to devolve some powers to the provincial level; it did not meet the basic formulas of the federal state structure and failed to take progressive steps to offer political autonomy beyond the current form of unitary state structure. In other words, the key arrangements in the accord and the amendment failed to assure political autonomy to the provinces since they conferred a large portion of executive powers to the central government; for example, the Indo-Lanka Accord gives authority to the President to appoint a governor in each province for 5 years. However, the same accord authorizes the President to sack the governor at any time. It is therefore highly likely the President would remove the governor when the former believes that the actions of the latter are not compatible with the interests of the ruling political class controlled by the Sinhalese. Moreover, if the President believes that the provincial councils are not performing well to meet the needs of the province, ‘‘the President can take over the position of the governor and Parliament will act as the provincial council’’ (Oberst, 1988). For this reason, it is safe to point out that the Indo-Lanka Accord and the Thirteenth Amendment grant excessive powers and authority to the President who acts as the head of the government. Since the governor has the authority to dissolve the provincial council, the President can apply leverage to the governor to either disturb the functions of the provincial council or dissolve the council and call new elections in order to have new provincial legislators favorable to the President and the governor. Therefore, crisis is likely between the central government and provincial council when either the President, as the head of the government, attempts to impose his preferences on the provincial council through the President appointed governor, or the president disapproves the agendas (or the laws) of the council. In fact, the Indo-Lanka Accord could have been considered a genuine power-sharing document on the table had it allowed the provincial councils to operate independently without the interference of the executive President,

138

A. R. M. IMTIYAZ

who enjoyed using the powers to disturb the functions of the councils through the governor. Thus, its inability to devolve the powers to the councils and the excessive powers of the President helped de-legitimized the Accord. However, India applied strong leverage on the violent Tamil movements to accept the accord and ‘‘forced the LTTE into an agreement’’ (Oberst, 1988). Since the failure of the Indo-Lanka Accord, Tamils believed that there were no genuine political discussions on power-sharing taking place in southern Sri Lanka: The talks between the LTTE and the UNP government led by then President Premadasa;11 the People Alliance’s (PA) peace engagements with the LTTE in 1994;12 the sixth round peace talks between the United National Front (UNF) led by the UNP and the LTTE in 2002 with strong opposition from Sinhalese hardliners, such as the Janatha Vimukthi Peramuna (JVP) and Jathika Hela Urumaya (JHU), parties that opposed any political engagements with the LTTE; and the majority report of the Expert Panel appointed by President Mahinda Rajapaksa in 200613 to provide advice to the All Party Conference did not convince many Tamils, particularly the Tamil nationalists, that the government controlled by the Sinhalese had engineered sincere efforts to reform the state structure of Sri Lanka. The narration thus far indicates that successive Sinhalese administrations consolidated and strengthened the unitary state structure in which the Sinhalese were dominant. The political outcome of this course of action was a movement away from moderation toward extremism on the part of the Tamil minority. Initially, mobilization against the state was staged politically by moderate Tamil elites, particularly the FP. Later, it entered the violent stage spearheaded by frustrated Tamil youth, who were victims of the above-mentioned Sinhala ethnocentric policies.

The Tamils’ Mobilization against the Sinhalese Resistance for Power-Sharing Mobilization against the state was gradual, but Tamil opposition to what they perceived as being the establishment of a unitary state structure with Sinhalese domination was clear. The first peaceful protests began as moderate Tamil political parties reacted when S.W.R.D. Bandaranaike abrogated the pact of 1957. The FP was a leading voice for the Tamils during this period. They staged a series of massive Satyagraha campaigns in the north and east. However, the government did not relent. As the FP campaign continued and appeared to be gaining momentum, the

Ethnic Conflict in Sri Lanka

139

government imposed emergency rules. The army was sent in to assist the police in restoring law and order in the Jaffna peninsula in 1961. The government left little room for political maneuvering toward introducing a federal form of government, which the Tamils aspired to as an acceptable solution to the conflict. The federal form of government proposed by the moderate Tamil leadership did not intend to jeopardize the country’s unitary structure of sovereignty. It was merely an attempt at a shared power structure with reasonable autonomy for them to remedy what they considered the continuous injustice against the Tamils by successive governments. The FP manifesto for the 1970 general elections reiterated this: It is our firm conviction that the division of the country in any form would be beneficial neither to the Country, nor to the Tamil-speaking people. Hence, we appeal to the Tamil-speaking people not to lend their support to any political movement that advocates the bifurcation of the country. (Wilson, 1988, pp. 85–86)

However, the federalist demands underwent several adaptations and changes during the 1970s. But the point is that the successive ruling political class failed to prove its willingness to politically engage with the Tamils who ruined their trust in the delivery of the state. In fact, Sinhalese elites and politicians continued to polarize the society with the ethnicization of politics; they introduced the new Constitution in 1972, in which Buddhism was given a preeminent place with State patronage in the Constitution, and banned the British-made concession to minorities in the previous constitution. This inflamed anti-Sinhalese sentiment among the Tamils, who considered the new constitution framed to legitimize the Sinhalese majority’s interests, and played a key role convincing the Tamils that they would not get justice from the state and its institutions. All the provisions that followed the enactment of the 1972 Constitution, such as the standardization of university entry and other indirect forms of harassment against the Tamils, led the Tamil moderate movement away from the federal model within the framework of Sri Lanka’s unitary structure. It is important to mention here that the radical elite-Tamil shift in the political agenda of TULF from federalism to secession can be considered a direct outcome of successive Sinhalese government actions and attitudes toward their fellow Sri Lankan Tamils, who were a de facto minority. In other words, it can be said that what caused the demand for a separate state and secession was a course of action pursued by several Sinhalese majority governments perceived by Tamils as discriminatory and unjust.

140

A. R. M. IMTIYAZ

The initial violence that erupted when young P. Sivakumaran had attempted to assassinate Somaweera Chandrasiri, Deputy Minister for Cultural Affairs under Mrs. Bandaranaike, led the center-left government in September 1970, when he visited Jaffna immediately after the adoption of the 1972 Constitution. Sivakumaran threw bombs at Somaweera Chandrasiri and also made another unsuccessful attempt to kill Alfred Duraiappah, the Jaffna Mayor, in February 1971. In an attempt to set up a low-level militant organization on June 5, 1974, Sivakumaran, an ardent young Tamil militant nationalist, attempted to rob a bank located in Jaffna’s Kopai town. However, the police fouled his attempt. This time Sivakumaran made an attempt on his own life by swallowing cyanide. According to Swamy, Sivakumaran, ‘‘died almost instantly’’ (1996, p. 29). A fear that he could have been subjected to state torture might have triggered Sivakumaran to carry cyanide pills and use them at an appropriate time. Sivakumaran’s suicide indeed increased Tamil enthusiasm for violence among frustrated Tamil youths, while sending a dire warning to the Sinhalese-dominated security forces. Thus, he became a legendary hero for Sri Lanka’s Tamil suicide mission, which played a central role in the formation of Tamil resistance against security forces. However, violent Tamil movement earned considerable attention among the Tamils in July 1975 when Mr. A. Duraiappah, the SLFP Tamil organizer for Jaffna, was assassinated. According to the University of Teachers for Human Rights, Duraiappah ‘‘posed challenges to the nationalist TULF (Federal Party) in the prestigious Jaffna electorates’’ (UTHR–Jaffna) (UTHR, 2000). This assassination was carried out by a 20-year-old Tamil youth named Velupillai Prabhakaran from the far north of the Jaffna peninsula. Since then, he has become the supreme commander of the LTTE, the principal Tamil politico-military movement, which has been fighting since 1987 with two armies, Indian and Sri Lankan. The violent Tamil campaign against the existence of the unitary state structure eventually internationalized the Tamil problem. The Tamil struggle for independence and secession in a separate state of Eelam was internationalized when in May 1979 the House of Representatives of the State of Massachusetts passed the Eelam Resolution calling for the creation of the Tamil state of Eelam (Ponnambalam, 1983). The organized and violent mobilization of Tamil youths is the chief factor in the development of the present stage of ethnic conflict in Sri Lanka. The media institutions controlled by the Sinhala elites in Colombo often describe them as a terrorist organization. If it is really true that LTTE is a terrorist organization, how has LTTE survived for two decades if it does not have a

141

Ethnic Conflict in Sri Lanka

popular base among the Tamils? It is true that the outfit often uses violence to mute opposition coming from the Tamil polity. What is also true is that competitive Sinhalese chauvinism coupled with pure anti-Tamil policies made the LTTE popular among ordinary Tamils. The key question here is has any Tamil since the 1948 Independence (from D. S. Senanayake onwards) realistically considered a Sinhalese politician as their chief leader. Muslims have provided genuine support to Sinhalese leaders (in UNP and SLFP) but not Tamils. Why? The simple answer is that Tamils do not have trust in the delivery of the Sinhalese political establishment. Such reality aided the Tamil youth armed resistance in the 1970s and 1980s, gathering momentum as the state continued to take repressive action against the Tamils and refused to share state power with the Tamil minority. As trust in the State to provide a solution eroded, hope in the success of the armed struggle and the ability of the Tamil state (Eelam) to provide a just solution with honor increased. However, it is significant to understand why were the Sinhalese unwilling to share power with the Tamils beyond the unitary state structure?

Why do They Oppose? The answer is most probably that the perception of the Sinhalese elites (both in the government and in the opposition) was that power-sharing with the Tamils under the federal constitution was the first step in the movement toward a separate state. The interesting fact is that although the Sinhalese in fact are the majority of the population on the island, as Sharma correctly observes (1988, p. 149), they are struggling with a minority complex vis-a`-vis the Tamils. They are overwhelmed by the reality that the Tamils of Sri Lanka together with the Tamil-speaking population of Tamil Nadu in South India number more than 55 million. Thus, while in Sri Lanka the Sinhalese outnumber the Tamils by more than three to one, but they are outnumbered by nearly six to one by the Tamil-speaking people of South Asia. There are vast differences in terms of historical tradition and geography between the Tamils of Sri Lanka and Tamil Nadu, yet there is a strong link between the two groups because of a common language. Hence, the Sinhalese fear that devolution of power to the minority Tamils through comprehensive autonomy or federation would jeopardize the sovereignty of Sinhalese-dominated Sri Lanka. Such a fear further stabilized when influential sections of Buddhist monks went against the formation of the federalism. Monks are concerned about a

142

A. R. M. IMTIYAZ

rightful heir to the island (Dhammadipa) and who should dominate it. They argue that anyone can live in Sri Lanka as long as Sinhala-Buddhists can enjoy cultural, religious, economic, political, and linguistic hegemony (Bartholomeusz & de Silva, 1988, p. 3). Therefore, many Buddhist monks consider a federalist solution as a ploy to break the current form of unitary state structure. Also, the political relationship between the Tamil political class in Sri Lanka and that of Tamil Nadu further aggravated the fears of Sinhalese; the moderate Tamil leadership had always maintained links with Tamil Nadu. And later, as Austin and Gupta identified (1994, p. 275), the militant Tamil leadership connected with the Tamil Nadu Tamils and the Tamil Nadu federal government and received overt support in terms of finance and provision of military training. These factors served to aggravate the fears of Sinhalese. As Wilson states, ‘‘the ordinary Sinhalese regards the total Tamil population as a threat to the existence of the Sinhalese race especially when viewed in the context of neighboring South India’s Dravidian millions’’ (1974, p. 15). In addition, many Sinhalese think that the reform of state structure to support a power-sharing scheme around ethnic lines, in Oberst’s words, ‘‘would lead to more communalism that will not be beneficial to a persuadably secular state’’ (1988, pp. 1–20). It is true that the Sinhala political establishment manipulated Sinhalese fear and symbols as a means to seize power. For their own political gains, they deliberately kept alive various fears that targeted Sinhalese sentiment against their fellow citizens, the Tamils. On the other hand, the Tamil leaders (both the moderates and the militants) are not free of blame. The Tamil leadership did not adequately explain to the ordinary Sinhalese their reasons for seeking a federal solution. The Sinhalese, too, were also deeply frustrated with the state and perhaps would have understood, as they had understood the message of the Sinhala nationalistic JVP that staged two failed violent rebellion against the State in 1971 and 1987–1989, respectively. In addition, radical Tamil mobilization targeted the innocent Sinhalese in their violent campaign. Even though Tamil militants deny involvement with tragic incidents, which caused the loss of numerous Sinhalese lives, the fact is that they did target innocent Sinhalese in their military (bombing and killing) campaigns. It is true that ordinary Sinhalese were not targeted prior to 1977 by militant Tamil groups. But as the ethnic conflict developed, there were several incidents in the 1980s. In 1985 for example, a major attack was launched on Anuradhapura in which many Sinhala civilians were killed (Elizabeth & Stirrat, 1990, p. 38). The Sinhalese elites and politicians,

143

Ethnic Conflict in Sri Lanka

including radical Sinhala nationalists such as JVP, took advantage of this feature of the Tamil militancy to alienate Sinhalese sentiment in favor of federalism. As a result, Sinhalese sentiment consolidated in favor of a unitary state structure and supported Sinhalese politicians opposed to power-sharing with the LTTE.

CONCLUSION What this study attempts to argue is that the process followed by successive Sri Lankan governments controlled by the Sinhala political class to politicize the country’s state structure effectively marginalized the minorities, particularly the Tamils. Regrettably, those moves to build a strong unitary state structure considerably helped weaken Tamil trust in fair delivery of the state and its institutions and produced violent separatist movements. This could happen in any ethnically divided society if the elites formulate policies to cater to the majority ethnic group while marginalizing the minority or minorities. Minorities seek their own state and institutions if they are geographically cornered. On the other hand, perhaps there still could be hope if a federal formula could be worked out, perhaps granting more autonomy now than the Tamil leadership would have considered acceptable in the early 1970s. In the language of tactical political science, consociational democracy alone could deter Tamils from seeking a separate state with its independent state institutions. In other words, power-sharing democracy has the potential to maintain the one-nation-state but with several focal points of power. One-language-two-nations was the threat that reared its head. There still can be One State – but with two or three nations with two national languages, several centers of autonomous power, several leaders, and several visions – working as statesmen rather than tribal leaders. This only can be achieved if the Sinhalese elites show sincere willingness to seek a solution beyond the boundary of current unitary structure, which was a primary product of the British colonial rulers. Tamil mobilization for a separate state would strengthen further if elites continued to ethnicize politics with the safeguard of unitary structure for their electoral ambitions. That is to say, the more the Sinhalese elites and political leaders show disinterest in the federal structure as a negotiated political solution, the stronger the Tamil mobilization for a separate state would win legitimacy both among the Tamils and the international community.

144

A. R. M. IMTIYAZ

NOTES 1. Mahavamsa says that the Sinhalese are the preservers of Buddhism and maintains that the Tamil rulers who ruled the Northern Sri Lanka as invaders and thus, their sole aims were to subjugate the Sinhalese and the island of Sri Lanka, http://lakdiva.org/mahavamsa/chap025.html. 2. The British Royal Commission under the Earl of Donoughmore visited Sri Lanka to ascertain why representative government, as chartered by the 1924 constitution, had not succeeded and to suggest constitutional changes necessary for the island’s eventual self-rule. The Donoughmore Constitution very first time introduced universal adult franchise and an experimental system of government to be run by executive committees. 3. Lord Soulbury is appointed head of a commission charged with the task of examining a new constitutional draft that the Sri Lankan ministers had proposed. The commission made recommendations that lead to a new constitution in 1947 called Soulbury Constitution. 4. Bhikku: monk or priest, member of the Buddhist order. 5. Satyagraha: nonviolent civil disobedience based on the Gandhian model. 6. During the 1940s and 1950s, the major traditional leftist parties opposed the discriminatory legislation. Legislation enacted against the plantation Tamils, and enthusiastically supported ‘‘parity of status’’ for the Sinhalese and Tamil languages. However, this situation changed from the end-1950s onward. The point is the LSSP and CP were electoral oriented parliamentary parties, and their base lay in the Sinhalese areas rather than Tamil areas. By the late 1950s, they were losing cadres and ‘‘voters’’ because of their progressive stand on the national question. Thus, by the mid 1960s, these left parties have changed their attitudes toward Tamils to win the southern Sinhalese support. 7. In 1972, the Government introduced a system of standardization of sciencebased courses. The system was devised in such a way that an average Tamil student would have to score higher marks than an average Sinhalese student, who appeared for the same qualifying examination for university admission to courses in medicine and engineering. For details accounts of the standardization policy, see de Silva, 1984. 8. The violence in 1977 in Jaffna erupted when the Sinhala police men, believed to have been maintained ties to Sri Lanka Freedom Party of Mrs. Bandaranaike, the party that lost elections in 1977 to the UNP, disturbed the Tamil cultural programmes organized by the local Tamils. Tamil organizers and activities opposed the police interference. Four Tamils were killed when the police open fired when violent altercation exploded to the violent confrontation. A wave of rioting followed, spreading quickly to the south. Among 1,500 people arrested were several wellknown Sinhalese extremists, accused of instigating violence against Tamils. 9. Two rounds of direct negotiations were held in July–August on 17th September between the government of Sri Lanka and six Tamil political parties. And six Tamil political parties were the Tamil United Liberation Front (TULF), the Tamil Eelam Liberation Organization (TELO), the Eelam Revolutionary Organization of Students (EROS), the Peoples Liberation Organization of Tamil Eelam (PLOTE), the Eelam Peoples Revolutionary Liberation Front (EPRLF), and the Liberation Tigers of Tamil Eelam (LTTE). All Tamil parties worked out four cardinal principles as the basis for the negotiation, which are today known as the ‘‘Thimpu principles.’’

Ethnic Conflict in Sri Lanka

145

The four principles are: (1) The Tamil people are a separate and distinct Nation; (2) There is a traditional homeland of the Tamils; (3) The Tamils have the inalienable right to self-determination; and (4) All those who want to make this island their home must be given all democratic and human rights. The Sri Lankan government’s reluctance to compromise the unitary structure and its refusal to recognize the Thimbu principles as the basis for the talk resulted in the abrupt premature termination of the negotiation. No agreement was reached. 10. Indo-Sri Lanka Peace Accord was signed on July 29, 1987, by Indian Prime Minister Rajiv Gandhi and President J. R. Jayewardene. The Sri Lankan Government made a number of concessions to Tamil demands, which included devolution of power to the provinces, merger – subject to later referendum – of the Northern and Eastern provinces, and official status for the Tamil language. India agreed to establish order in the North and East with an Indian Peace Keeping Force (IPKF) and to cease assisting Tamil insurgents. Militant groups except the LTTE, although initially reluctant, agreed to surrender their arms to the IPKF. 11. The UNP government talked with the LTTE in 1989. Both parties opposed the presence of the Indian forces in Sri Lanka for different reasons. Thus, decided to ‘‘talk’’ mainly to discuss the ways to expel the Indian forces and to destabilize the Indian blessed provincial council administration. Also, these talks completely ignored the core issues and the causes that led to the deadly ethnic civil war. However, talks helped the LTTE to obtain arms and ammunition from the Premadasa led government to launch the military campaign against the Indian forces. With the withdrawal of the Indian forces and the collapse of the EPRLF led provincial council, the disagreements and distrust between the LTTE and government damaged the prospect of continuous engagements and thus peace talks collapsed and Eelam war 2 commenced on 11 June, 1990. 12. The four rounds of direct talks between the LTTE and the People Alliance government led by Chandrika Bandaranaike Kumaratunga and exchange of letters, channeled through the International Committee of the Red Cross (ICRC) staged in 1994–1995. However, parties neither discuss the core issues of the conflict nor show willingness to discuss the issues concerning power-sharing. Talks collapsed and Eelam war 3 started in 1995. On August 3, 1995, Sri Lanka President Kumaratunga released a ‘‘Devolution’’ package. The Tamil opinions maintained that the ‘new’ proposals once again, refused to recognize the existence of the Tamil homeland, rejected an asymmetric approach, continued to treat all the provinces in the same way and to insist on a unitary state (http://www.tamilnation.org/conflictresolution/ tamileelam/index.htm#1995%20Devolution%20Packagey) Moreover, the UNP successfully undermined PA’s constitutional reform efforts of 1997–2000 with no good reason. 13. On December 6, 2006, the majority report engineered by 11 out of the 17 members of the Experts Panel proposed devolution to the provincial level and recommend temporary North East merger for a period of 10 years, to be followed by a referendum to ensure that it is genuinely the will of the people of the east. While it would not go so far as to explicitly propose a federal solution, the report made it clear that the political solution had to go beyond the confines of the present unitary constitutional framework. But the nationalist outcry against the report has been so strong that the government has publicly dissociated itself from it.

146

A. R. M. IMTIYAZ

REFERENCES Arasaratnam, S. (1964). Ceylon. Englewood Cliffs: Prentice-Hall. Austin, D., & Gupta, A. (1994). The politics of violence in India and South Asia. In: P. Janke (Ed.), Ethnic and religious conflicts: Europe and Asia (pp. 267–300). Aldershot: Dartmouth Publishing Company Ltd. Bartholomeusz, T. J., & de Silva, C. R. (1988). Buddhist fundamentalism and minority identities in Sri Lanka. Albany: State University of New York Press. Becker, J. (2006, March). Funding the ‘‘final war’’ LTTE intimidation and extortion in the Tamil Diaspora. Human Rights Watch, 18(1), 6, http://hrw.org/reports/2006/ltte0306/ Bose, S. (1994). States, nations, sovereignty: Sri Lanka, India and the Tamil Eelam movement. New Delhi: Sage. Chattopadhaya, H. P. (1994). Ethnic unrest in modern Sri Lanka: An account of Tamil–Sinhalese race relations. New Delhi: M.D. Publications Pvt. Ltd. Daily Telegraph, London (1983, 11 July). de Silva, C. R. (1984). Sinhala–Tamil relations and education in Sri Lanka: The first phase, 1971–1977. In: R. B. Goldmann & J. Wilson (Eds), Independence to statehood: Managing ethnic conflict in five African and Asian States (pp. 125–126). New York: St. Martin’s Press. de Silva, K. M. (1981). A history of Sri Lanka. New Delhi: Oxford University Press. De Votta, N. (2004). Blowback: Linguistic nationalism, institutional decay, and ethnic conflict in Sri Lanka. Stanford: Stanford University Press. Dharmadasa, K. N. O. (1992). Language, religion, and ethnic assertiveness: The growth of Sinhalese nationalism in Sri Lanka. Ann Arbor: University of Michigan Press. Elizabeth, N., & Stirrat, R. L. (1990). The generation of communal identities. In: J. Spencer (Ed.), Sri Lanka: History and the roots of Conflict (pp. 19–44). London: Routledge. Gunasinghe, N. (1984). The open economy and its impact on ethnic relations in Sri Lanka. Committee for Regional Development, Sri Lanka – the ethnic conflict: Myths, realities, perspectives. New Delhi: Navrang. Gunasinghe, N. (1989). Community identity and militarization in Sri Lanka: Sri Lankan armed forces. In: Wignaraja & Hussein (Eds), The challenge in South Asia: Democracy, development and regional cooperation. New Delhi: Sage. Horowitz, D. L. (1985). Ethnic groups in conflict. Berkeley: University of California Press. Imtiyaz A. R. M., & Stavis, B. (in press). Ethnic conflict in Sri Lanka. The Journal of the Third World Studies. Jayewardene, K., & Uyangoda, J. (1986). Special issue on the national question in Sri Lanka. South Asia Bulletin, 6, 1–47. Kearney, R. N. (1967). Communalism and language in the politics of Ceylon. Durham: Duke University Press. Kearney, R. N. (1985, February). Sri Lanka in 1984: The politics of communal violence. Asian Survey, 25 (2), A survey of Asia in 1984: Part II, pp. 257–263. Mahumud Ali, S. (1993). The fearful state: Power, people and internal war in South Asia. London: Zed Books. Nithiyanandan, V. (1987). An analysis of economic factors behind the origin and development of Tamil Nationalism in Sri Lanka. In: C. Abeysekere & N. Gunasinghe (Eds), Facets of ethnicity in Sri Lanka. Colombo: Social Scientists’ Association.

Ethnic Conflict in Sri Lanka

147

Oberst, R. C. (1988). Federalism and ethnic conflict in Sri Lanka. The Journal of Federalism, 18(Summer), 1–20. Ponnambalam, S. (1983). Sri Lanka: The national question and the Tamil liberation struggle. London: Zed Books. Rajanayagam, D. H. (1986). Tamil ‘‘Tigers’’ in Northern Sri Lanka: Origins, factions and programmes. International Asian Forum, 7(1 and 2), 63–85. Sharma, K. L. (1988). Society and polity in modern Sri Lanka. New Delhi: South Asian Publishers Pvt. Ltd. Swamy, M. R. N. (1996). Tigers of Lanka: From boys to guerrillas. Colombo: Vijitha Yapa Bookshop. University Teacher for Human Rights. (2000, September). Bulletin, 24. Wickeremeratne, A. (1995). Buddhism and ethnicity in Sri Lanka: A historical analysis. Colombo: International Centre for Ethnic Studies. Wilson, A. J. (1974). Politics in Sri Lanka: 1947–1973. London: Macmillan. Wilson, A. J. (1988). The break-up of Sri Lanka: The Sinhala–Tamil conflict. London: Christopher Hurst. Wilson, A. J. (1994). S.J.V Chelvanayakam and the crisis of Sri Lankan Tamil Nationalism 1947–1977: A political biography. Honolulu: University of Hawaii Press.

This page intentionally left blank

THE PEACE PROCESS IN SRI LANKA Alan Bullion The conflicts that characterise the Sri Lankan society are played out or mirrored in the civil society sphere. Civil society in Sri Lanka is divided ethnically and geographically, as well as between moderates and hardliners. The ethnic and geographical divisions – between Sinhalese and Tamils and between the northeast and the rest of the country – have been reinforced by the lack of contact and frightful experiences during the war, language barriers and lack of information. They are a result of the war and at the same time factors that complicate conflict resolution. The shrunken space for civil society in the war zone, and the need for civil society actors to liaise with the guerrillas, contributes to the ethnic/ geographical divide. The polarisation between hardliners (nationalists on both sides) and moderates (e.g. the non-governmental peace organisations) also divides the civil society. Foreign donors tend to support the moderate representatives of civil society and to conceptualise them as ‘civil society in Sri Lanka’, something which can contribute to a deepening of the moderatehardliner divide. Sri Lanka’s civil society is inescapably shaped by the civil war, and its various actors engage in a battle over war and peace and contribute to shaping the future of the island and its people. The war in Sri Lanka is often conceptualised as an ethnic conflict. It has its roots in a post-independence tendency of democratically elected governments to primarily cater to the majority Sinhalese constituency. Through politics related to language (most importantly the Sinhala Only Conflict and Peace in South Asia Contributions to Conflict Management, Peace Economics and Development, Volume 5, 149–169 Copyright r 2008 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1572-8323/doi:10.1016/S1572-8323(08)05010-8

149

150

ALAN BULLION

Act of 1956), citizenship, university admission and development, aimed at discarding the colonial heritage and British/Christian domination, the minority groups were gradually marginalised1 (all-island census, 1981). Protests against the ‘Sinhalesation of the state’ were staged mainly by Tamils from the north and developed into an LTTE-led militant struggle for Tamil self-determination. Sri Lanka is currently experiencing its longest cessation of hostilities since the outbreak of the war in 1983. A ceasefire agreement (CFA) is in place since February 2002, and Norway has facilitated six rounds of peace talks between the Sri Lankan government and the LTTE, before the process was stalled in 2003. Although only the two main adversaries have been directly involved in negotiations, a number of other conflicts complicate the peace process: the Sri Lankan society is divided by harsh party political power struggles, and opposition parties have a tradition of throwing a spanner in the works of peace initiatives taken by the ruling party; the LTTE’s claim to be ‘the sole representative of the Tamil people’ is disputed by other Tamil political parties, an LTTE breakaway fraction and human rights groups; and Muslims protest their lack of representation in peace talks. The net effects of the constitutional changes which took place under the Jayewardene government in 1978 are several and have been reflected in the outcome of the past elections. One premise has been that a directly elected president could not run the risk of alienating the minorities in the multiethnic state where the Sinhalese constitute the majority. This, coupled with the president’s vast executive and proclamation powers, was perhaps intended to bring in legislative and administrative measures that could ensure that the simmering separatist tension would not boil over and the socialist economy would be accelerated along the free-market path. Hence, the views of the president on the twin issues of conflict resolution and the economy are critical. The narrow victory of Mahinda Rajapakse in Sri Lanka’s presidential election in November 2005 has been seen as a vote in favour of a hardline approach towards resolving the country’s long-running ethnic conflict. For many it signals a key moment in the country’s history, where voters have picked a candidate heading an alliance with strong views on devolution of power to the Tamil minority, on the management of tsunami aid and on economic policy. Nationalist and Buddhist parties strongly backed Rajapakse, and they expect to play an influential role in his administration. The two main candidates, Rajapakse and the main opposition leader Ranil Wickremasinghe, had radically different approaches to the peace process and to the economic policy. Wickremasinghe had said he would restart

The Peace Process in Sri Lanka

151

stalled peace talks if elected and also favoured greater foreign investment and privatisation. His defeat has come as a blow to business interests, particularly as the Sri Lankan economy is in crisis. There are some who now fear that with the February 2002 ceasefire stretched to the limit, a possible return to hostilities cannot be ruled out. The key factor in the election was the virtually non-existent Tamil vote in rebelheld regions of the north and east and areas like Jaffna town where the Tamil Tiger influence is strong. The push for a boycott apparently came from the Tamil Tiger rebels. There are some accounts of Tamils there being prevented from going out to vote in polling stations located in governmentheld areas. Although some areas of Colombo saw a lower Tamil vote, in many other parts of the country, Tamils did vote in large numbers and Wickremasinghe benefited. He also received wide backing from the Muslim community. But with the situation in the north and east, the effect of the normally critical minority vote was diluted. Analysts are divided on why the rebels pushed for a boycott, especially as Wickremasinghe had campaigned on a peace platform. Some say the rebels are frustrated at what they believe is the failure of successive governments to press on with the peace process. Many Tamils living in the north and east genuinely believe that the Sinhalese-Buddhist majority will never allow them to enter into a powersharing agreement. But others question the rebels’ commitment to the peace process. They believe that by effectively sealing Wickremasinghe’s chances and helping usher in a hardline presidency, the rebels have laid the ground for renewed confrontation. At the time of writing, a further short round of peace talks led by Norway had been held in Geneva during late February. As tensions mounted, another series of meetings scheduled for April 2006 was cancelled.

HISTORICAL BACKGROUND Civil society in Sri Lanka has, to a large extent, been shaped by British colonial rule and the establishment of the modern, democratic state in the first half of the 20th century. In pre-colonial times, grass roots communities organised around the need for collective work in temples and for irrigation. A notion of pre-colonial cooperation and harmony and an ideal traditional Buddhist society, which was lost due to colonialism and modernisation and should be revived, today forms part of the Sinhalese nationalist discourse and of the mobilisation rationale of the large community development organisation Sarvodaya (see Gombrich & Obeysekere, 1988; Brow, 1990).

152

ALAN BULLION

Colonialism brought modern organisations, many of which sprung from Christian missionary activity and carried out educational and social work to benefit disadvantaged groups, e.g. the Baptist Mission (1802) and in the 1880s the YMCA, YWCA and the Salvation Army. The Christian organisations were soon mirrored by a similar set of Buddhist, Hindu and Muslim organisations, e.g. the Muslim Education Society (1890), the Maha Bodi Society (1891) and the Young Men’s Buddhist Association (1898). During the first half of the 20th century, Boy Scout and Girl Guide associations were formed, as were the Rotary Club of Colombo and the Red Cross Society. It has been argued that social movements grew in Sri Lanka as a reaction to the grave social and economic changes brought about by colonial rule (Gombrich & Obeysekere, 1988; Brow, 1990). However, most of the movements were not purely indigenous reactions but were largely inspired or instigated by Western movements. The temperance movement (with its precursor in the United States) reacted to increased drunkenness and colonial revenues earned on alcohol and grew greatly in the first decades of the 20th century. In 1914, the Total Abstinence Central Union had 30,000 members. The cooperative movement started in the early 20th century to provide credit for rural agriculturalists and expanded to the fields of production and marketing, reaching a membership of over 1 million. The first rural development organisation, Lanka Mahila Samiti, was established in 1930. In the 1950s and 1960s, however, cooperatives, rural development societies and school development societies were co-opted by local government structures and used to implement development policies and influence and mobilise the grass roots on political issues. A public space, where popular organisation and activity were not controlled by religious and political authorities, was created in the wake of the Buddhist revivalist and nationalist movement of Angalika Dharmapala. With the movement, a Buddhist civil society independent of the temple space was formed. In the 1920s, mahajana sabhas (people’s councils) were founded, which fostered a popular consciousness of constitutional rights, franchise and legislative politics. In addition, youth associations, women’s clubs, temperance societies and marginalised caste associations thrived in the 1920s. The labour movement came to use the social and political space opened up by these movements. The labour activism was urban based (the printers of Colombo organised the first labour strike in 1893), initiated by students who had returned from Britain with socialist ideas, and often led by middleclass professionals. The movement and its leadership were closely linked to

The Peace Process in Sri Lanka

153

the religious and political agitation of the independence struggle. The left thus abandoned civil society politics for state instrumentalism. As we have seen, civic mobilisation and organisation had been carried out around several different lines: temperance, rural, caste, democratic, religious, anticolonialism and socialist. While the labour movement contributed to the secularisation of civil society politics along class lines, religious and/or nationalist divisions soon came to dominate. Much of the anti-colonial struggle was aimed towards the recognition of both Sinhalese and Tamil language and culture, but ended up in postindependence Sinhalese dominance over the state, followed by Tamil nationalist protest and LTTE’s separatist struggle. The Sinhalese-Tamil nationalist struggles were fought by actors from both political parties and civil society. The large-scale non-violent Tamil protests of the 1950s and 1960s were often organised by civil leaders. With the rise of militancy, earlier movements in the north and east diminished, e.g. that of the oppressed castes (which launched considerable campaigns for temple entry in 1968), teachers’ associations, progressive writers’ associations as well as the trade unions and leftist movements.

THE PEACE PROCESS AND TAMIL GRIEVANCES The commencement of the peace process after the change of government in December 2001, the signing of the CFA in February 2002 and the six rounds of peace talks between government and LTTE representatives during 2002 and 2003 lit hope for peace. The factors that made this peace attempt possible were the change of government to a party not involved in the last failed peace attempt and subsequent escalation of war in the mid-1990s, strong international support and pressure for a non-military solution, Norwegian facilitation and the fact that both sides considered negotiations more strategic than continued military confrontation. The role played by ‘civil society’ in setting this process in motion was a highly contradictory one. The contribution of civil society peace work was neither obvious nor easily pinpointed. Although other factors were clearly more important, the peace work carried out by civil society organisations played an indirect role. Popular support was a key component in enabling the coming to power of the United National Party (UNP) in late 2001 and thus enabling the start of the peace process. Civil society actors had struggled to build popular support for peace negotiations through peace education, exchanges, study visits and media campaigns for many years. Although we cannot prove how

154

ALAN BULLION

much this work mattered in forming people’s opinions, we can assume that people who had positive experiences of awareness-raising projects and events were more positive to negotiations and third-party involvement than they would otherwise have been. Moreover, the arguments advanced by civil society peace actors through the media and in advocacy work were taken up and used by key actors in a situation when they found the peace path strategically advantageous. The urge by civil society actors for political solutions and third-party intervention also served to legitimise international involvement. The contacts between civil society leaders and representatives of the international community are likely to have encouraged and facilitated international interest in conflict resolution in Sri Lanka. The environment for civil society peace work changed considerably from December 2001, as peace workers found themselves fighting a winning battle. Key actors, who were earlier the target of civil society peace advocacy, had now taken over the initiative in talking and acting for peace, leaving civic groups at the rear. The peace process was between two main actors representing the two sides in the conflict (the government and the LTTE). Civil society peace groups took on (or were given) the role of mobilising support for this process and raising awareness among the masses about the need for it. Some peace organisations suggested how to best take the process forward and in times of stalemate urged the parties to continue. NGO press statements advised the government and opposition not to let their power struggle obstruct the process. Most peace groups were praising the peace process in 2002 and 2003 and were reluctant to bring up criticism against it and its leading protagonists, fearing that criticism could threaten the whole peace attempt. As time passed, however, more and more organisations debated and raised concerns about human rights, for instance. While a number of civil society representatives – mainly the peace NGOs – acted in support of the peace process, others mobilised protests against it. Sinhalese nationalist groups condemned the Norwegian involvement in Sri Lanka’s internal affairs, Norway’s perceived bias towards the LTTE, the government’s concessions to the LTTE and its violations of the CFA and of human rights in the northeast. The Sinhalese nationalists feared a division of the country (a betrayal of the motherland) and an acceptance and expansion of LTTE terrorism. Vociferous protests (including the burning of the Norwegian flag) have been organised, with Buddhist monks and political parties (the Janatha Vimukthi Peramuna [JVP], Jathika Hela Urumaya) playing a central role. These protests have often been larger and more visible than the demonstrations in support of the peace process. That the Sinhalese nationalist fears are met with a response among the Sinhalese

The Peace Process in Sri Lanka

155

masses was indicated by the results of the parliamentary elections in April 2004. The UNP government that had been in charge of the peace process was rejected and the opposition came to power on an election manifesto, which was critical to the way the UNP had led the peace process. This change of government contributed to the stalemate in the peace process. Sinhalese nationalist protest has been curbing the process, not the least of which, since the JVP, has been part of the government since 2004. Hunger strikes staged by prominent monks were a major factor to take into consideration as the government and the LTTE negotiated a mechanism for cooperation regarding tsunami aid. The CFA, to some extent, broke the isolation of the war-torn northern Sri Lanka and enabled meetings between Tamils from the north and Sinhalese from the south and exposed southerners to the devastation of the war zone. The cross-ethnic and cross-geographical contacts within Sri Lanka’s divided civil society thus increased somewhat. However, the conflict between the pro-peace process civil society actors and the critics of the peace process intensified.

VIOLENCE IN SRI LANKA SINCE 2002 The armed conflict in Sri Lanka between the Tamil rebels LTTE and the Sinhalese-dominated government began in 1983 when LTTE stepped up its actions after anti-Tamil violence had spread across the island. However, the conflict had been simmering for years, with recurring spates of violence between the Sinhalese majority and the Tamil minority. In the state-building process that followed independence in 1948, demands for a separate Tamil state in the north and east of the country gained support in response to reforms that favoured the Sinhalese over the other ethnic groups in the country.2 The armed conflict in Sri Lanka has been severe in terms of casualties, with over 64,000 deaths as a commonly cited figure. In the northern and eastern parts of Sri Lanka, a civil war has played out between a strong rebel group and the government forces, a situation in which civilians seldom have been spared. Political assassinations and bombings of public buildings and transport have been commonplace, in particular in the capital Colombo. Another feature of LTTE’s violence campaign has been the use of suicide bombers. Political violence has been a prevalent feature of Sri Lankan politics since the early 1970s.3 Besides the armed struggle for an independent Tamil Eelam, there have been armed uprisings by the left-wing JVP in 1971 and

156

ALAN BULLION

1987–1989.4 Violence has pervaded individual, social and political relations and has been established ‘as a legitimate mode of political behaviour, whether by the state or anti-state forces’ (Jayadeva, 1996). Several unsuccessful attempts have been made to solve the conflict between the LTTE and the government (see de Silva & Peiris, 2000; Loganathan, 1996; Rotberg, 1999; Rupesinghe, 1998). The current peace process came underway after the election in 2001 that brought Ranil Wickremasinghe and the UNP to power. Under the auspices of Norway, the parties signed a CFA in February 2002. The peace process produced six rounds of negotiations between the government and the LTTE, before the LTTE withdrew from the peace talks in April 2003. Since then, the peace process has been stalled, although there have been efforts to reinitiate the negotiation process.5 The ceasefire in February 2002 was signed between the LTTE and the Sri Lankan government. In the agreement the parties agreed to abstain from any ‘offensive military operations’. Moreover, the forces were separated and buffer zones created between government-controlled and rebel-held areas. Other Tamil paramilitary groups that had been working together with the Sri Lankan government were to disarm. A strong emphasis was put on creating the conditions conducive for peace negotiations: ‘the Parties have agreed to y refrain from conduct that could undermine the good intentions or violate the spirit of this Agreement y.’6. To oversee the ceasefire, the Sri Lankan Monitoring Mission (SLMM) was set up. The mission is headed by Norway and has a Nordic composition, including monitors from Norway, Sweden, Denmark, Finland and Iceland. SLMM has its headquarters in Colombo and is organised in six districts (Jaffna, Mannar, Vavuniya, Trincomalee, Batticaloa and Ampara). Combined with the six district offices, there are local monitoring committees with representatives from the LTTE and the government. The task of SLMM is to investigate alleged violations and to monitor compliance with the agreement. In addition, the monitoring committees have sought to solve conflicts over the implementation of the agreement at the local level. The ceasefire led to immediate gains in the security situation. Within months, the A9 highway to Jaffna opened and the security barriers in Colombo were dismantled, allowing the free movement of goods and people over the entire island. This constituted vast improvement for the general public, in particular in the war-torn areas in the north and the east. The result was an upsurge in social and economic activity in the country. However, the optimism that characterised the situation on the ground in the first year of the peace process has gradually been replaced by growing frustration.

The Peace Process in Sri Lanka

157

The SLMM has published monthly information concerning complaints about ceasefire violations and their rulings on these. Complaints about ceasefire violations encompass several disparate types of actions, including the illegal carrying of arms, movement in the zone of separation and hostile acts against the civilian population. The vast majority of the complaints have been towards the LTTE. Correspondingly, most rulings of ceasefire violations have also been against the LTTE. However, the SLMM has been criticised for not taking a strong enough stance against the violations committed by the Tamil rebels.7 An overwhelming number of complaints have concerned child recruitment and abduction of adults. For instance, of the 1,955 complaints against the LTTE during year 2003, 670 were related to child recruitment. The second largest category was abduction of adults, numbering 348 cases. Most complaints towards the government’s side concerned harassment carried out by the military and police forces (see Fig. 1). The rationale behind the ceasefire was that negative peace had to prevail in order for durable peace to be built. Remembering previous attempts at solving the conflict, both the LTTE and the government were concerned about the other party taking advantage of the situation by using the pause in fighting to rearm and regroup. For this reason, both parties sought to negotiate from a position of military strength. Thus, the CFA does not prohibit the procurement of arms or continued recruitment for the LTTE and government forces. Indeed, since the ceasefire in 2002 both parties have continued to build up their respective military strength (Ganguly, 2004, pp. 910–911). A particular sensitive issue has been the LTTE’s efforts to develop its air capabilities, which has resulted in vigorous opposition by the Sri Lankan government and India. The following section presents three forms of violence present in Sri Lanka during the peace process since the CFA in 2002: (1) violence between the LTTE and the government, (2) violence within the LTTE and (3) violence between the LTTE and other Tamil groups.

VIOLENCE BETWEEN GOVERNMENT FORCES AND THE LTTE Since the February 2002 CFA, there have been few instances of direct confrontation between the LTTE cadres and the Sri Lankan forces. Generally, both parties have shown great restraint and have controlled their forces on the ground. However, there have been some notable confrontations that could have resulted in an escalation, but the parties

20 02 20 03 02 20 -05 02 20 07 02 20 09 02 20 11 03 20 01 03 20 -03 03 20 05 03 20 07 03 20 -09 03 20 11 04 20 -01 04 20 03 04 20 05 04 20 -07 04 20 09 04 20 11 05 -0 1

158 ALAN BULLION

450 LTTE

GOSL

400

350

300

250

200

150

100

50

0

Fig. 1.

Ceasefire Complaints.

Months

The Peace Process in Sri Lanka

159

refrained from retaliating. For instance, in July 2002 a Sri Lankan Army soldier was shot dead in a buffer zone between government-held and LTTEcontrolled areas in the Jaffna peninsula. The LTTE and the government have also been involved in several confrontations at sea. The conflict has had an unusual naval dimension through the LTTE’s elite force, the ‘Sea Tigers’, that has been used to attack the Sri Lanka Navy. In February 2003, LTTE members committed suicide after a weapons inspection by the SLMM off Delft Island. In March 2003, the Sri Lanka Navy intercepted and sunk an LTTE merchant ship on the grounds that it was transporting weapons, which would have constituted a breach against the ceasefire. These incidents were followed by attacks carried out on a Chinese trawler and troop transport ship off Trincomalee in March 2003, allegedly carried out by the LTTE.8 However, these serious incidents did not result in renewed fighting between the parties. There have also been several instances in which the LTTE has challenged the government at the local level. This was particularly notable in the Trincomalee and Ampara districts during 2002. One incident occurred in the beginning of October in connection with a demonstration in the Ampara district. During the demonstration, the gathered crowd of 500–1,000 people attempted to force itself into the camp of the Special Task Force of the Sri Lankan Police (STF). The police opened fire, killing seven and injuring several others. According to the police and some observers, members of the LTTE were among the attackers. However, the SLMM was not able to firmly prove the involvement of the rebels.9 In the same month, the LTTE held six government soldiers hostage after the police had arrested two rebels carrying arms in government-held areas (which was not allowed under the CFA). There have also been some high-profile acts of violence between the government and the LTTE, which could be seen as tactical attempts by the parties to show their strength against one another. For instance, on 31 May 2005, a senior army intelligence operative was shot and killed in Colombo – allegedly by the LTTE. While this was not the first killing of security personnel since the ceasefire, it was certainly the assassination of the most high-ranking military.

VIOLENCE WITHIN THE LTTE The LTTE gained prominence as the leading Tamil rebel group in the second half of the 1980s.10 Several other Tamil paramilitary groups have

160

ALAN BULLION

existed parallel to the LTTE, but were marginalised through internal fighting between the Tamil groups. Since its formation in 1976, the LTTE has been headed by leader Velupillai Prabakharan with strict discipline, and challenges to LTTE’s dominance have been thwarted with force. In March 2004, a faction led by the military commander of the east, Karuna Amman, broke away from the LTTE to create a new Tamil party in the east. In wake of the split, the LTTE command in Vanni launched attacks on the Karuna faction. Heavy fighting ensued, which killed and displaced a large number of people. Karuna’s forces were defeated, and Karuna himself went into hiding. The LTTE has insisted that Karuna’s departure was one by individual choice rather than symptomatic of larger strands of dissent in the east. Several explanations for the split have been proposed. It is generally held that the Tamils in the east fear being marginalised, since the leadership of the LTTE traditionally has been drawn from the north. This is also in line with Karuna’s own rationale for the split. In an interview shortly after the breakaway, he stated that ‘fighters from the east were not being treated properly by the northern-based leadership’ (AFP Interviews, 2004).11 Karuna’s revolt against the LTTE leadership came as a surprise both to the Sri Lankan government and to the Norwegian facilitators. Initially, the government did not take a clear stance in the conflict but chose to regard it as an internal matter of the LTTE. For instance, they refused to negotiate a separate ceasefire with Karuna. The Norwegian mediators also made reference to the conflict between the Tamil rebels as being an internal question of the LTTE; they have seen their task as only to mediate between the LTTE and the government.12 The Norwegians applied the same argument in connection with the government crisis in 2003. The result of the split has been a violent struggle for political turf in the east. Elements believed to be loyal to Karuna have attacked LTTE members and civilians sympathetic of the LTTE in order to undermine their strength in the east. These killings have also spread to Colombo. In retaliation, the LTTE has hit back at pro-Karuna elements. An upsurge of violence happened in July 2004, when a dozen people were killed in Batticaloa and surroundings. The eastern part of Sri Lanka was severely hit by the Tsunami in late December 2004, and in the first period after the devastating catastrophe, the killings came to a halt. However, during the spring of 2005, tensions were further aggravated. The LTTE has accused the government forces of being implicated in some of these killings. In March 2005, it was revealed by journalist Amanatha Perera that there was some truth to these allegations. He found evidence that the Tamil rebels supportive of Karuna had a base in government-held

The Peace Process in Sri Lanka

161

territory, on the border to the northeast, from which they have been launching attacks (Perera, 2005a). This internal feuding has led to a number of high-profile killings. Most importantly, in February 2005 the LTTE’s political leader in the east, E. Kaushalyan, was assassinated. The attack was carried out in a government-held area, allegedly by elements loyal to Karuna. The incident was widely condemned by the international community. The Sri Lankan government also condemned the incident, however, stating ‘the proximity of army camps y add[ed] to suspicions of military connivance in the killing’ (Perera, 2005b). The split within the LTTE and the subsequent internal feuding had several important consequences. First of all, the breakaway by the Karuna faction seriously called into question LTTE’s claim to be the sole representative of the Tamil people.13 The existence of parallel Tamil paramilitary groups gives evidence of the divisions within the Tamil community. However, the split within LTTE also questions the extent of support for the leadership within the movement. On the part of the government, it can be assumed that the split has caused concerns about how well the LTTE actually can control their own cadres. In this sense, the bargaining position of the LTTE has been weakened vis-a`-vis the government.

VIOLENCE BETWEEN THE LTTE AND OTHER TAMIL GROUPS In Sri Lanka, a substantial part of the violence during the peace process has been carried out by the LTTE against other Tamil groups. In the 2001 election, the Tamil National Alliance (TNA) was formed, which includes parties such as Tamil United Liberation Front (TULF) and the Tamil Eelam Liberation Organisation (TELO). TNA recognised the LTTE as speaking for the Tamil cause and has since then functioned as a political surrogate of the LTTE. There are also several other Tamil groups that have fought against the LTTE alongside the government forces. These groups, including Eelam People’s Democratic Party (EPDP), Eelam People’s Revolutionary Liberation Front (Varathar) EPRLF(V) and People’s Liberation Organisation of Tamil Eelam (PLOTE), disarmed under the 2002 ceasefire. Members of these organisations have been specifically targeted by the LTTE during the peace process. Therefore, violence has been carried out against Tamil groups that have worked for the Sri Lankan security forces and that disarmed in accordance

162

ALAN BULLION

with the CFA. Therefore, they have a reduced possibility to defend themselves. The problem has been exaggerated by the fact that the LTTE under the ceasefire has been able to move more freely in areas under government control. According to Human Rights Watch (HRW), attacks against rival Tamil paramilitary groups increased in May and June 2003 after the LTTE had suspended its participation in the peace talks. In the period February 2002–August 2003, for instance, 51 people associated with Tamil groups were reported killed or missing (Human Rights Watch, 2003). In July 2004, the EPDP claimed that since the ceasefire in 2002, 125 of their members have been killed by the LTTE (Perera, 2004b). In 2004, there was a murder attempt at the leader of EPDP, Douglas Devanada. The LTTE has also intimidated and attacked academics and journalists that have voiced criticism against the organisation. In a similar vein, there was considerable violence against Tamil candidates in connection with the general elections in 2004. Election-related violence has been a widespread phenomenon in Sri Lanka.14 Notably, there have been a number of high-profile incidents in connection with elections. During the presidential election campaign in 1994, Gamini Dissanayake, the candidate of the main opposition party UNP, was killed in a suicide bomb attack carried out by the LTTE. President Chandrika Kumaratunga lost her eye as a result of an attack by the LTTE in the run-up to the presidential election in 1999. The election in 2004 was a result of a crisis between the incumbent government and the opposition, mainly the Sri Lanka Freedom Party (SLFP) and JVP. In particular, the president and her party SLFP were dissatisfied with the concession made by the UNP government to the LTTE. The crisis was unleashed in November 2003 when president Kumaratunga took over three important ministerial posts (Defence, Media and Information, and the Interior) and suspended the parliament. Three months later, she dissolved the parliament and announced general elections to take place on 2 April 2004. The general election of April 2004 was no exception in terms of large-scale violence, although it was generally reported as more peaceful than preceding elections. However, compared to previous elections, a significant difference was that the vast majority of violations took place in the Eastern province.15 In total, 2,303 incidents were recognised and five people were killed in election-related violence (CMEV, 2004; PAFFREL/MFFE, 2004). There were specific arrangements to allow the people in the LTTE-held areas to cast their votes at polling stations on the border between LTTE-held and government-controlled areas. This constituted a significant improvement for

The Peace Process in Sri Lanka

163

voters in the rebel-held territory. However, the LTTE would not allow candidates from parties other than the closely aligned TNA to campaign in rebel-controlled areas. Political activists of other parties were particularly targeted: a Tamil candidate of the UNP in Batticaloa and an EPDP activist were killed. Local election monitors were also attacked. These attacks, along with an environment characterised by intimidation and threats, seriously undermined the electoral process in the east and north. It was generally believed that the LTTE was behind most of the violence. The result was that several candidates from other parties resigned ahead of election day (CMEV, 2004, p. 5; PAFFREL/MFFE, 2004, p. 8). Generally, the Sri Lankan government – both the one led by Ranil Wickremasinghe and the one under Mahinda Rajapakse that came to power in the 2004 election – has done little in response to the killings of their allies. Although the new government to a larger extent have been condemning the killings, this has led to few concrete results (Human Rights Watch, 2005; Perera, 2004b). The LTTE has also carried out human rights abuses against the Tamil population. In particular, the LTTE has continued the practice of forced and voluntary recruitment of child soldiers. In October 2004, UNICEF had documented 3,516 cases of child recruitment during the peace process (Human Rights Watch, 2004, p. 3). This is a flagrant human rights violation, which has received heavy criticism from the international community and human rights organisations. In spite of the criticism, the LTTE seems to believe that the continued recruitment is necessary for them to preserve their strength and position in the north and the east (ibid.). In 2003, the LTTE and the Sri Lankan government signed an action plan for children affected by war. However, in spite of the important provisions made in the action plan – such as the establishment of transit centres and rehabilitation for child soldiers released by the rebels – it has only led to minor improvements in these areas. On the contrary, child recruitment seems to be on the rise. The increased movement allowed after the CFA has made it possible for the LTTE to reach beyond the territories of their control for new recruits (ibid., p. 16). After the LTTE dissident group led by Karuna was defeated in April 2004, a large number of child soldiers were released as the forces disbanded. However, this only resulted in a new recruitment drive by the LTTE in the east. The continued human rights abuses carried out by the LTTE have weakened the support from the international community. However, the forced and continued recruitment has to be seen in light of the perceived need by the LTTE to maintain their strength in the east and north, both during the negotiation process and in case of a prospective agreement.

164

ALAN BULLION

CONCLUSIONS The CFA of February 2002 dramatically changed the security situation in Sri Lanka. As noted, regular fighting between the LTTE and Sri Lankan government forces has ceased and there has been improvement in many areas of human rights. In this sense, the ceasefire and the peace process has opened up space for a political solution to the conflict. However, the ceasefire has also opened up new ways of pursuing and maintaining the conflict lines. For instance, both parties are still building up their military strength and are recruiting new troops. The freedom of movement granted under the ceasefire allowed the LTTE to open political offices in government-controlled areas. While this is a necessary step in an eventual transformation of the LTTE into a viable political actor, the newly won freedom has been used for less benign reasons. For instance, one result is that extortion, intimidation and forced recruitment have expanded beyond the areas of LTTE control. Moreover, since the ceasefire, violence has to some extent taken on new shapes. As seen in other peace processes, it is in the interest of both parties not to be associated with ceasefire violations. In Northern Ireland, for instance, concerns about the ceasefire and the Mitchell principles16 resulted in a change in violence tactics by the paramilitary groups – for instance, from punishment shootings to punishment beatings – so that the violence would not be seen as a breach of the ceasefire (Mac Ginty & Darby, 2002). During peace processes, key players often carry out political assassinations, bomb explosions and other deeds to challenge a nascent peace. Armed conflict commonly experiences the rise of organised groups, warlords and politicians that gain a position of power and profit from war-related activities. These actors will only accept peace on terms, under which their investments and privileges are not severely threatened. So-called spoiler violence can be directed towards the opponent in order to instil fear and undermine political support for the peace process. However, violence to destabilise a peace process may also target moderates within their own group, also referred to as ‘internal feuding’. All these types of spoiler violence have accompanied the Sri Lankan peace process. The violence in the east poses one of the most serious challenges to the peace process in Sri Lanka. This is not surprising, given the ethnic mix in the region. Compared with Tamils in the north, where they make up a clear majority, Tamils in the east constitute only 40% of the population. In this context, it is important to point out that members of the Muslim community, in particular in the east, have also been targets of extortion and intimidation. The LTTE seems

The Peace Process in Sri Lanka

165

determined to maintain their dominance in the region and are prepared to use violence to do so. The government, on their part, seems prepared to take advantage of the situation by accepting spoiler violence that weakens the LTTE. Peace deals are commonly negotiated between parties that have less than a favourable record in human rights. This raises difficult dilemmas for the international actors involved in peace making. The human rights community has been critical of the fact that human rights have only been accorded a marginal role in the peace process. Norway and the SLMM have been severely criticised for not being harder on the LTTE but have allowed the rebels to be involved in the peace process in spite of the continued violence and human rights abuses, without any repercussions. Indeed, the continued violence has seriously undermined the legitimacy of the SLMM. However, from the point of view of Norway as the facilitator to the peace talks, it is important to maintain a working relationship with the LTTE in order to be able to put constructive pressure on the rebels. What implications has the violence had for the peace negotiations in Sri Lanka? Overall, the continued violence by the LTTE has questioned the intentions of the organisation regarding its stated goal of reaching peace and democracy. According to analyst Jehan Perera, ‘[t]he negative impact of the LTTE’s ceasefire violations goes beyond the specific incidents themselves. It becomes very difficult for any Sri Lankan government to push ahead with the peace process at the same time that clear and regular LTTE violations of it are taking place’ (Perera, 2005c). The violence by the LTTE can partly be understood in light of the asymmetrical nature of the conflict, a common characteristic of internal armed conflict (Zartman, 1995). The LTTE is the weaker part, in the sense that the government has a legitimate claim to power and a monopoly on the use of violence. In such a situation, violence is one of the few tools with which the weaker party has to put pressure on, and extract concessions from, the government. From this perspective, violence is an inevitable part of the negotiation process. However, the problem is that the government sees LTTE challenges against the government as a lack of commitment towards the peace process, regardless of the motives behind the violence. Moreover, violence against other Tamil groups, the hard clampdown on the Karuna faction, and violence against civilians are partly a result of the LTTE’s striving to remain internally strong in order to do well in the negotiations with the government. However, the violence towards the Tamil community seriously put in doubt their claim to represent the Tamil people and their commitment to genuine peace. The failure of the Sri Lankan government to deal with violence and human rights abuses, and its alleged

166

ALAN BULLION

complicity in some of it, also questions the intentions of the government. In terms of reaching a political solution to the armed conflict, the political crisis and the subsequent election that brought a new government to power clearly constituted an important shift in the peace process. The attempt by the government to reinitiate peace talks with the LTTE has been inhibited by the dependence of the government on parties such as the JVP that are opposed to any concessions to the LTTE. In many cases, we have seen that violence has brought the parties back to the negotiation table and has made them more determined in their efforts to pursue peace. Not so in Sri Lanka. Instead, continued violence has undermined trust between the parties and raised opposition against the peace process. The December 2004 tsunami initially produced a massive show of solidarity with the affected – composed of all ethnic groups. Ordinary people and local civil society organisations quickly responded with relief, which was given without concern about the victims’ religion or ethnic background. These hopeful civil society connections across ethnic divides, however, soon evaporated, as political and military leaders and international NGOs increasingly took control over the relief and rehabilitation efforts (Harris, 2005). The massive influx of money from abroad has contributed to changing the dynamics within the civil society in the tsunami-affected coastal areas. While many community-based organisations and local NGOs have grown as they engage in foreign-funded relief and reconstruction work, there is also a substantial brain drain of personnel from local organisations to wealthier international organisations and a feeling that large international organisations disregard the work of local civil society groups. The 2004 tsunami has prompted both peace NGOs and Sinhalese nationalist groups to work concretely with relief and reconstruction, which has made possible increased credibility among ordinary people. But the large gap between the pro-peace process civil society groups and the Sinhalese nationalist groups remains and has been amplified with the influx of recourses following the tsunami. Likewise, LTTE maintains its aspiration to control the civil society space in the north and east, while structures of political patronage in many cases have been strengthened in the wake of tsunami reconstruction.

NOTES 1. The Sinhalese (most of whom are Buddhists) make up 74% of the population; the Tamils (who are Hindus and Christians) 18%; and the Muslims, or Moors, 7% (according to the last all-island census from 1981).

The Peace Process in Sri Lanka

167

2. In Sri Lanka, approximately 74% population is Sinhalese, while the Tamils make up some 18%. There is also the ethnically distinct group of Muslims, constituting 7%. 3. For an overview of the causes and impact of violence in Sri Lanka, see Samaranayake (1997, 1999) and see also Jayadeva and Biyanwila (1997). 4. On JVP, see Gunaratna (2001). The JVP is a Maoist-nationalist party that represents an extreme-nationalist Sinhalese view in Sri Lanka. 5. For analyses of the initiation and developments of the current peace initiative, see for instance Ganguly (2004), Ho¨glund and Svensson (2003) and Philipson (2001). 6. The ceasefire agreement (CFA) is available online, for instance, at Sri Lanka Monitoring Mission (SLMM), and see www.slmm.lk. 7. See for instance University Teachers for Human Rights (2002), Human Rights Watch (2004) and Samset (August, 2004). 8. SLMM Press Release, 2 April 2003. 9. SLMM Press Release, 10 Oct 2002. 10. On LTTE, see Swamy (2002, 2003) and Joshi (1996). 11. On various explanations, see Ganguly (2004, pp. 913–914). 12. The Norwegian government maintained the same position during the government crisis in November 2003. 13. See for instance Ganguly (2004, p. 914) and Perera (2004a). 14. Sri Lanka is an electoral democracy and competitive elections have been held regularly. However, the armed conflict has led to serious flaws in the electoral processes. On election-related violence, see PAFFREL (2004) and Reilly (2001). 15. The two main organisations monitoring violence in connection to the election were Centre for Monitoring Election Violence (CMEV) and People’s Action for Free and Fair Elections (PAFFREL). There were also international monitors in Sri Lanka during the elections, for instance the European Union. 16. The Mitchell principles constituted a set of principles of democracy and nonviolence that the parties had to commit to, to be allowed to participate in the peace negotiations.

REFERENCES AFP Interviews. (2004, March 9). Tamil Tiger renegade vows no return to war in Sri Lanka. Agence France Press (AFP). Brow, J. (1990). Nationalist rhetoric and local practice: The fate of the village community in Kukulewa. In: J. Spencer (Ed.), Sri Lanka: History and the roots of conflict. London: Routledge. CMEV. (2004, April). Final report on election related violence, General Election. Colombo: Centre for Monitoring Election Violence (CMEV). de Silva, K. M., & Peiris, G. H. (Eds). (2000). Pursuit of peace in Sri Lanka: Past failures and future prospect. Kandy: International Centre for Ethnic Studies/USIP. Ganguly, R. (2004). Sri Lanka’s ethnic conflict: At a crossroad between peace and war. Third World Quarterly, 25(5). Gombrich, R., & Obeysekere, G. (1988). Buddhism transformed: Religious change in Sri Lanka (pp. 243–255). Princeton: Princeton University Press.

168

ALAN BULLION

Gunaratna, R. (2001). Sri Lanka: A lost revolution? (3rd edn.). Kandy: Institute of Fundamental Studies. Harris, S. (2005). The role of local solidarity in Sri Lanka’s tsunami disaster response. Polity, 2(3). Ho¨glund, K., & Svensson, I. (2003). The peace process in Sri Lanka. Civil Wars, 5(4). Human Rights Watch. (2003). Sri Lanka: Political killings during the ceasefire. Human Rights Watch. (2004). Living in fear: Child soldiers and the Tamil Tigers in Sri Lanka. Vol. 16, No. 13(C). Human Rights Watch. (2005). Sri Lanka: End killings and abductions of Tamil civilians. Jayadeva, U. (1996). Militarization, violent state, violent society: Sri Lanka. In: K. Rupesinghe & K. Mumtaz (Eds), Internal conflicts in South Asia (p. 121). Oslo: PRIO/SAGE. Jayadeva, U., & Biyanwila, J. (Eds). (1997). Matters of violence: Reflections on social and political violence in Sri Lanka. Colombo: Social Scientists Association. Joshi, M. (1996). On the razor’s edge: The Liberation Tigers of Tamil Eelam. Studies in Conflict and Terrorism, 19(1). Loganathan, K. (1996). Lost opportunities: Past attempts at resolving ethnic conflict. Colombo: CEPRA, Faculty of Law. Macginty, R., & Darby, J. (2002). Guns and government: The management of the Northern Ireland Peace Process (p. 89). Basingstoke: Palgrave. PAFFREL. (2004). Chronology of political violence in Sri Lanka during election times: People’s action for free and fair elections (PAFFREL) on Sri Lanka’s electoral system. PAFFREL/MFFE. (2004, 2 April). Final report on parliamentary general election. PAFFREL/ MFFE. Perera, J. (2004a, March 8). Root causes of LTTE need to be addressed. Available online www.peace-srilanka.org Perera, J. (2004b, July 26). The remedy for killings during the peace process. Available online www.peace-srilanka.org Perera, J. (2005a, March 21). The joint funding mechanism: Why human rights protections have to be emphasized. Available online www.peace-srilanka.org Perera, J. (2005b, February 14). Averting a return to pre-tsunami impasse. National Peace Council. Available online www.peace-srilanka.org Perera, J. (2005c, April 11). Spoilers step up campaign while president dreams again. Available online www.peace-srilanka.org Philipson, L. (2001). Negotiating processes in Sri Lanka. A History of Ethnic Conflict in Sri Lanka: Recollection, reinterpretation & reconciliation. Colombo: Marga Institute. Reilly, B. (2001). Democracy in divided societies: Electoral engineering for conflict management. Cambridge: Cambridge University Press. Rotberg, R. I. (Ed.) (1999). Creating peace in Sri Lanka: Civil war and reconciliation. Washington, DC: Brookings Institution Press. Rupesinghe, K. (Ed.) (1998). Negotiating peace in Sri Lanka: Efforts, failures and lessons. London: International Alert. Samaranayake, G. (1999). Political violence in Sri Lanka: A diagnostic approach. Terrorism and Political Violence, 9(2). Samaranayake, G. (1997). Patterns of political violence and responses of the government in Sri Lanka, 1971–1996. Terrorism and Political Violence, 11(1). Samset, I. (2004, August). Whose mission? Limits and potentials of the SLMM. Lines. 7.

The Peace Process in Sri Lanka

169

Swamy, M. R. Narayan (2003). Inside an elusive mind: Prabhakaran. Colombo: Vijitha Yapa Publications. Swamy, M. R. Narayan (2002). Tigers of Lanka: From boys to guerrillas (3rd edn.). Colombo: Vijitha Yapa Publications. University Teachers for Human Rights. (2002). In the shadows of Sattahip: The many faces of peace. Special Report, Jaffna Branch, Tamil Nadu, India. Zartman, I. W. (Ed.) (1995). Elusive peace: Negotiating an end to civil war. Washington, DC: Brookings Institute.

This page intentionally left blank

ECONOMIC IMPERATIVE FOR PEACE IN SRI LANKA Muttukrishna Sarvananthan 1. INTRODUCTION The economic effects of ethnic conflict in Sri Lanka are multifarious. A discussion of the economic effects of ethnic conflict could encompass the opportunity cost of the war (i.e., the foregone income due to the war at micro- and macro-levels), the economic impact of the military expenditures (on both sides of the war), financing mechanisms (both national and international) of the rebel movement, and the impact of economic sanctions on rebel territory. It should be noted that the economic effects of ethnic conflict in Sri Lanka is a relatively under-researched area (Arunatilake, Jayasuriya, & Kelegama, 2000; Goonetileke, 1998; Grobar & Gnanaselvam, 1993; Gunatilleke et al., 2001; Kelegama, 1999; O’Sullivan, 1994, 1997, 2001; Rankaduwa & Cooray, 1999; Ravano, 2001; Richardson & de Samarasinghe, 1991; Ross & Samaranayake, 1986; Seabright, 1986). It is beyond the scope of this paper to discuss the plethora of economic effects of ethnic conflict in Sri Lanka. Therefore, I propose to focus on a few selected important aspects of the economic effects. They are the relationship between economic growth and ethnic conflict, the competition between social expenditures and defence expenditures, the defence expenditures of Sri Lanka in comparison to other South Asian countries and some other

Conflict and Peace in South Asia Contributions to Conflict Management, Peace Economics and Development, Volume 5, 171–184 Copyright r 2008 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1572-8323/doi:10.1016/S1572-8323(08)05011-X

171

172

MUTTUKRISHNA SARVANANTHAN

internal conflict-ridden countries around the globe, and the economic implications of the labour-intensive military strategy. The aims and objectives of this paper are to: (i) find out the trade-off between ethnic conflict and economic growth in Sri Lanka; (ii) compare and contrast the defence expenditure with the social expenditures of Sri Lanka; (iii) compare and contrast Sri Lanka’s defence expenditure within the South Asian region and with selected internal conflict-ridden countries in the developing world; and (iv) discuss the cost-effectiveness of the labourintensive military strategy pursued in Sri Lanka. The results are: (i) the trade-off between ethnic conflict and economic growth in Sri Lanka may be higher than hitherto acknowledged by other researchers; (ii) the defence expenditures have overtaken social expenditures consistently since 1995; (iii) Sri Lanka’s defence expenditures, as a proportion of the national income, is the highest in the region (barring Pakistan) and among selected internal conflict-ridden countries in the developing world; and (iv) the labour-intensive military strategy pursued in Sri Lanka is economically costly. The overall argument of the paper is that the high economic cost of the civil war in Sri Lanka is unsustainable in the long-run, and therefore peaceful resolution of the conflict is sine qua non for economic prosperity of the country.

2. ETHNIC CONFLICT AND ECONOMIC GROWTH It is believed that Sri Lanka is an exceptional country because despite a protracted ethnic conflict it has achieved respectable rates of economic growth. The latest proponent of this view is O’Sullivan (2001). Although these researchers concur that the growth of the economy would have been greater if not for the war, nevertheless they commend the average growth of about 5% during the 20 years between 1981 and 2000 despite a deadly civil conflict (e.g., see Arunatilake et al., 2000, p. 5; Gunatilleke et al., 2001, p. 5; Rankaduwa & Cooray, 1999). However, I beg to differ with the proponents of this view. To begin with, the official economic data of Sri Lanka is unreliable due to variety of reasons. However, due to the absence of alternative data we have to rely on such imperfect data. The average annual growth of the real gross domestic product (GDP) during the 22-year period of ethnic conflict (i.e., 1983–2004) was 4.45%; whereas, in the 22-year period prior to the ethnic conflict (i.e., 1961–1982) it was 4.36%1 (Table 1). These figures reveal that the average annual conflict-time growth rate was negligibly higher than the

173

Economic Imperative for Peace in Sri Lanka Table 1.

Conflict-time and Pre-conflict Economic Growth 1961–2004. Annual Average Real GDP Growth (%)

1983–2004 (22 years of ethnic conflict) 1961–1982 (22 years prior to ethnic conflict)

4.45 4.36

Source: Central Bank of Sri Lanka, Annual Report 2004, Special Statistical Appendix Table 2, Colombo.

average annual pre-conflict growth rate. With profound economic liberalisation since 1977, the economic growth rate in the 1980s and 1990s should have been higher than the previous two decades, but it was not the case. The primary reason for this relatively low-growth rate during the postliberalisation period could be attributed to the negative effects of the ethnic conflict since 1983. The average annual conflict-time GDP growth rate of 4.45% is an overestimation because since 1990 the national income accounts of Sri Lanka do not include the North&East province. As the government lost control of vast areas of the North&East province to the rebels the economic and social data gathering in that province became impractical. Most of the statistical tables in the Department of Census and Statistics and the Central Bank publications have a footnote mentioning that the North&East province is excluded. We may be able to conjecture that the North&East province would have experienced negative growth since 1990 when the civil war intensified. If the supposedly negative growth rates of the North&East province were added to the positive growth rates of the rest of the country the overall growth rates would have been lower than the official figures of the Central Bank used in Table 1. Therefore, the conflict-time economic growth rates may be considerably lower than the pre-conflict rates in spite of economic liberalisation. Thus, the notion that the Sri Lankan economy has been resilient in spite of a deadly conflict could be a myth. According to Keynesian economic theory, public expenditure, especially investment (including in the defence sector), has the potential to boost economic growth. That is, military expenditure could have a positive impact on economic growth (Benoit, 1978 cited in Deger, 1992, pp. 37–38). However, this theory would hold only if the country concerned has an armament industry and that such public expenditure in the defence sector is during peacetime. However, in the Sri Lankan case it does not have an armament industry to boost economic growth. Further, the rising public expenditure in

174

MUTTUKRISHNA SARVANANTHAN

the defence sector has been during wartime, whereby direct and indirect negative impacts of the war on the economy overshadowed the positive impacts of public expenditure on the war effort. Hence, the necessary conditions for military expenditures to boost economic growth are absent in Sri Lanka. For example, the purchase of military hardware during peacetime would contribute to economic growth in the form of investment in defence sector. But, during wartime such investment in military hardware may have a depreciation rate of 100% because the lifetime of such hardware could be just a matter of days. Hence, investments in military hardware during wartime could be classified as recurrent expenditure (consumption) rather than capital expenditure (investment) or both (Sen, 1992, p. 17).

3. DEFENCE EXPENDITURES VERSUS SOCIAL EXPENDITURES The data on defence expenditures of most developing countries are unreliable; usually they are underestimations. There are legitimate methodological problems in the measurement of defence expenditures (Sen, 1992). Besides, there are also deliberate attempts to camouflage defence expenditures supposedly to maintain secrecy. The latter is quite widespread in countries at war (internal or external). Sri Lanka is a country where defence expenditure data are unreliable due to both the aforementioned reasons (Sarvananthan, 2002a). The defence budget of Sri Lanka does not include disability benefits and pensions of soldiers, which is a further source of underestimation (IMF, 2001). The Central Bank publishes only the annual recurrent and capital expenditure of the Ministry of Defence. It is difficult to obtain the breakdown of such expenditure. Defence procurements do not follow the usual cabinet tender procedure laid out for public sector procurements. The Customs Department does not publish the entire imports of military hardware and equipment. Even the Ministry of Finance (Treasury Department) does not have details on defence procurements. There is no transparency or accountability in the public expenditures on defence. I suppose even the Auditor General has little knowledge of the expenditures of the Ministry of Defence. The foregoing anomalies in the documentation of defence expenditures are a serious concern to the research community. Further, some of the camouflaged military expenditures in the Sri Lankan context are as follows. One is the deflection of foreign aid to the war effort.

Economic Imperative for Peace in Sri Lanka

175

According to anecdotal evidence, heavy vehicles and equipment from donor funded infrastructure projects are occasionally diverted for the use of the army, especially during the times of major military offensives. These will unavoidably have an economic cost in terms of delay in the implementation of such infrastructure projects and will in effect the indirect military expenditures that should be classified as such. Second, the upkeep of the former Tamil rebel groups such as the EPDP, EPRLF, PLOTE, and TELO remains a mystery. These rebel groups have been and are rewarded financially in kind for their allegiance to the state security forces. It is also reported that these former rebel groups are provided with concessionary bank finance through the state banks to run their business enterprises. Further, the leaders of some of these groups are also provided contractual appointments in the public sector. All these payments in kind should be accounted in the defence budget. Third, at times of major military battles, wounded soldiers are treated in both military and civilian hospitals. Military hospitals are run by the defence ministry budget and civilian hospitals by the health ministry budget. Strictly speaking, the cost of treating the wounded soldiers in civilian hospitals should be borne by the defence ministry. The foregoing are just few examples of the camouflaged military expenditures in the ethnic conflict of Sri Lanka. Hence, the actual defence expenditures of Sri Lanka would be higher than the Central Bank figures used here (see also Sarvananthan, 2002a). Despite the anomalies in the data on defence expenditures we rely on it because of lack of alternative data. The defence expenditure, which was minuscule in the pre-conflict period, has shot-up enormously since the early-1980s. For example, defence expenditure shot-up from LKR 16 billion in 1991 to LKR 77 billion in 2000, i.e., nearly a fivefold increase in just a decade (Table 5). In the past few years, defence expenditures have become the single largest public expenditure (barring public debt repayment) of the government. Despite the protracted civil conflict, total social expenditures2 exceeded defence expenditure till the early 1990s. However, since 1995 defence expenditures, as a proportion of the total public expenditure, consistently have far exceeded total social expenditures (Table 2). In 1995, the civil war entered a vicious phase with the strategy of ‘war for peace’ or ‘peace through war’. One of the outcomes of this strategy is the acceleration of defence expenditures and the deceleration of social expenditures. Thus, since 1995 the gap between defence and social expenditures widened considerably, particularly in 2000 and 2001 (Table 2). This would have a profound negative impact on the human and social

176

MUTTUKRISHNA SARVANANTHAN Table 2.

Defence/Social Expenditures as a Proportion of Total Public Expenditure (%) 1991–2004. 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Defence expenditures Social expenditures Education Health Poverty RRR

11.2 12.0 10.9 12.9 14.3 17.7 16.8 11.2 13.0 9.9 12.8 12.7 13.5 12.6 3.5 5.4 4.3 4.5 3.5 4.2 4.2 2.4 3.1 1.9 2.6 5.2 5.0 4.7 5.3 4.5 3.7 5.7 2.0 3.2 3.0 2.0 1.1 0.69

16.9 12.0 4.7 4.0 2.5 0.80

16.4 12.7 5.0 4.8 2.6 0.27

17.0 9.8 3.8 3.9 2.0 0.14

14.2 9.3 2.6 3.8 2.4 0.47

10.8 9.6 3.3 3.6 2.2 0.52

9.5 11.0 9.1 11.0 3.1 3.4 3.6 4.7 1.8 1.8 0.60 1.1

Notes: (a) Education includes higher education as well; (b) health includes indigenous medicine and social services as well; (c) poverty alleviation programmes are Janasaviya (1991–1994) and Samurdhi (1995–2004); (d) RRR means relief, rehabilitation, and reconstruction; and (e) From 1991 to 1994 R&R and poverty are clubbed together. Source: Central Bank of Sri Lanka, Annual Report, various years.

development indicators of Sri Lanka, which historically had an impressive record among the developing world. However, during the past 3-year peacetime (2002–2004) the gap between defence and social expenditures (as a proportion of total public expenditures) closed in, and in 2004 it was equal (Table 2). This was not due to any decline in the defence expenditures in absolute amount but due to a higher increase in social expenditures than defence expenditures.

4. DEFENCE EXPENDITURE IN COMPARATIVE PERSPECTIVE Not only that the defence sector of Sri Lanka has been competing with social sectors for public funds since 1995, it is also the case that Sri Lanka has been the largest spender of its GDP on defence compared to other internal conflict-ridden countries around the world (since 1995) and the second largest in South Asia,3 after Pakistan, between 1991 and 2003 Table 3. Sri Lanka spent nearly 3% of its GDP on defence in 1991, which shot-up to over 5% in 1995–1996 and remained around 4% until 2001. However, it dropped to 3.1% in 2002 and 2.7% in 2003 during peacetime (Table 3). Data for Sri Lanka in Table 3 are a considerable underestimation. According to the Central Bank of Sri Lanka data, defence expenditures as a percentage of the GDP during 1996–2000 were 6.6, 5.7, 6.2, 5.4, and 6.8%,

177

Economic Imperative for Peace in Sri Lanka Table 3. Country

Defence Expenditures as a percentage of the GDP 1991–2003 (b). 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

South Asia Bangladesh India Nepal (a) Pakistan Sri Lanka

1.0 2.5 0.9 5.8 2.8

1.1 2.3 0.9 6.1 3.0

1.2 2.4 0.9 5.7 3.1

1.4 2.3 0.9 5.3 3.4

1.4 2.2 0.8 5.3 5.3

1.4 2.1 0.8 5.1 5.0

1.4 2.2 0.8 4.9 4.2

1.0 2.2 0.8 4.8 4.2

1.4 2.3 0.9 4.6 3.6

1.4 2.3 0.9 4.5 4.5

1.3 2.3 1.1 4.7 3.9

1.2 2.2 1.5 4.7 3.1

1.2 2.1 1.6 4.4 2.7

Conflict-ridden Colombia Myanmar Philippines Sierra Leone Sudan Uganda

2.0 3.2 1.3 2.1 2.8 2.5

2.4 3.4 1.3 3.0 2.5 1.6

3.0 3.5 1.4 3.0 2.8 1.7

2.6 3.5 1.4 2.9 2.5 1.9

2.6 3.7 1.4 2.9 1.7 2.0

2.8 3.5 1.4 2.0 0.9 2.0

2.9 2.7 1.2 1.1 1.0 1.9

3.1 3.5 2.3 2.0 1.2 1.1 N.A N.A 1.8 2.4 2.3 2.4

3.4 2.1 1.1 4.1 2.9 2.1

3.8 1.7 1.0 2.2 N.A 2.1

4.1 1.2 1.0 1.5 2.8 2.3

4.4 N.A 0.9 1.7 2.4 2.3

Notes: (a) Expenditures on paramilitary forces are excluded; (b) some yearly data in this table differ from the previous edition of this working paper because of the revision of data in retrospect by SIPRI as and when more reliable data becomes available. Source: Stockholm International Peace Research Institute, The SIPRI Military Expenditure Database, Stockholm. http://www.sipri.org/contents/milap/milex/mex_database1.html

respectively (Sarvananthan, 2002a, p. 78). The Stockholm International Peace Research Institute (SIPRI) drawing from national statistics compiles these data. In the same way the Sri Lankan data is unreliable, the data of other countries may also be unreliable. However, it would not affect the international comparison as a particular source of error may be there in all the countries under consideration because SIPRI uses a common methodology to standardise all national data. Pakistan has been the largest spender of its GDP on defence in South Asia during 1991–2003. Pakistan is not a comparable country to Sri Lanka for two reasons. First, the army has ruled Pakistan for most of its postindependence history. Even during intermittent civilian rule, the army had played a major role in governing the country. Therefore, historically, defence expenditures of Pakistan have been quite high. Second, Pakistan has a territorial dispute with India (both have fought two major wars since independence), and hence the justification for high defence expenditures. Thus, if we leave aside Pakistan, Sri Lanka becomes the largest spender of its GDP on defence in the region in the past 13 years. Notwithstanding the fact that Bangladesh, India, and Nepal have their own internal conflicts,

178

MUTTUKRISHNA SARVANANTHAN

their defence expenditures are far less than that of Sri Lanka during the years under consideration (Table 3). The more appropriate countries to compare with Sri Lanka are the countries that are afflicted by a vicious internal conflict/civil war. Accordingly, we have compared the defence spending (as a proportion of GDP) of Sri Lanka with Colombia, Myanmar, Philippines, Sierra Leone, Sudan, and Uganda between 1991 and 2003. The result is unambiguous. Between 1991 and 1994, Sri Lanka was the second largest spender on defence after Myanmar; however, since then till 2001 Sri Lanka has been the largest spender. Another important feature to remember is that Sri Lanka’s defence spending is significantly higher than of its competitors. Nevertheless, during peacetime in 2002 and 2003 Colombia has overtaken Sri Lanka as the highest spender of GDP on defence. Furthermore, Sri Lanka’s spending of 2.7% of its GDP on defence in 2003 is almost equal to that of 1991, and the lowest in the period under consideration (Table 3). What is the rationale of comparing data on defence expenditures as a proportion of the GDP? The GDP is a country’s total income. Like individuals or households who have to allocate their income to different categories of expenditures, a country should allocate its income to different competing expenditures. That is, a country should allocate its income among different sectors according to its priority. On average, Sri Lanka has spent almost 4% of its GDP on defence during the decade 1991–2000 (Table 3). Total public expenditure of Sri Lanka as a proportion of the GDP in 2000 was nearly 40%. That is, Sri Lanka has spent 10% of the contribution of its total public expenditure to the GDP in 2000 on defence during the decade from 1991 to 2000, which is quite excessive. In sum, regional and international comparisons of competing countries reveal that the defence expenditure of Sri Lanka is the largest among comparable countries. This trend does not augur well for the economy of Sri Lanka in the long-run. We also present another set of data from South Asia that further confirm Sri Lanka’s lead in the development of the defence sector in the region (Table 4). This data covers the period 1985–2002 and provides a long-term development of the defence sector in the region, and Sri Lanka’s lead position in that developmental process. Sri Lanka’s total defence expenditure of 680 USD in 2002 was the third largest after India and Pakistan. Though in absolute terms Sri Lanka’s defence expenditure is ranked third, it has the largest defence expenditure in relation to the population and physical size. The average annual rate of

179

Economic Imperative for Peace in Sri Lanka Table 4.

Military Development in South Asia. India

Defence Expenditure 2002 13,070 (US$ millions in 1999 prices) Defence Expenditure 3.6% 1985–2002 (Annual % increase) Defence Expenditure per 12.4 capita 2002 (US$ in 1999 prices) Armed Forces Personnel () 4.4% (Percentage increase 1985–2002) Number of Soldiers per 1,000 1.18 Population 1998 Military Holdings Index 2002 189 (a) (1985 ¼ 100)

Pakistan 3,180

2.5%

21.2

Bangladesh 620

90

4.2%

8.6%

4.3

3.7

21.3%

50.5%

4.5

0.98

162

Nepal

282

104%

2.0 560

Sri Lanka 680

7.0%

36.0

618.2%

6.1 2074

Note: (a) Military Holdings Index is based on the aggregate number of heavy weapons a country has, such as combat aircraft, artillery, ships, and tanks. Source: Mahbub ul Haq Human Development Centre (2005).

increase in defence expenditure between 1985 and 2002 was second highest in Sri Lanka (7%) after Nepal (8.6%). The per capita defence expenditure of 36 USD in Sri Lanka was the highest in South Asia in 2002. Further, 618% increase in the number of armed forces personnel in Sri Lanka between 1985 and 2002 was the highest in South Asia (six times the second highest rise in Nepal). As a corollary, the number of soldiers per 1,000 populations in Sri Lanka was six in 1998,4 which is the highest in the region and would have further increased in recent years. Moreover, Military Holdings Index of Sri Lanka in 2002 at 2,074 was the largest in South Asia (taking 1985 as the base year); almost four times that of Nepal (the second largest) (Table 4). This set of data further confirms the priority given to military development in Sri Lanka in the past two decades, which is a serious concern to peace-loving citizens. Though some may justify it as due to the protracted civil conflict, but we have to remember that other South Asian countries (like India, Pakistan, and Bangladesh) also experience vicious internal conflicts. Besides, no matter how acute the internal conflict is, a country cannot spend on defence beyond its means. Money does not necessarily win wars. I would augment this argument below.

180

MUTTUKRISHNA SARVANANTHAN

5. LABOUR-INTENSIVE MILITARY STRATEGY A salient feature of the ethnic conflict in Sri Lanka is that the military strategy adopted by the Sri Lankan government has been one of labourintensive. This strategy has overburdened the economy. A breakdown of Sri Lanka’s defence budget into recurrent and capital expenditure from 1991 to 2004 is provided in Table 5. Accordingly, over 80% of the defence budget during 1991–2004 had been spent on recurrent expenditures and less than 20% spent on capital expenditures. This is an indication of the labourintensive military strategy of successive governments. Only during peak years of military activity, such as in 1995, 1996, and 2000 did the capital expenditures increase in comparison to recurrent expenditures. Moreover, during the last three years of peacetime (2002–2004) the share of recurrent expenditures has increased further (Table 5). In the total Government budget of Sri Lanka, only two-thirds is accounted by recurrent expenditures and one-third by capital expenditures. The civil war in Sri Lanka has been one of competition for control of territories between the warring parties, i.e., the state security forces and the Liberation Tigers of Tamil Eelam (LTTE). Who controls which areas in the North&East province seems to be the objective of military strategy rather

Table 5. Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Defence Budget 1991–2004 (LKR Million).

Recurrent Expenditure 12,609 15,627 17,677 21,989 25,815 33,117 35,094 45,314 44,632 57,841 52,537 56,094 56,790 64,403

(81%) (87%) (85%) (86%) (74%) (72%) (76%) (79%) (82%) (75%) (77%) (89%) (90%) (85%)

Capital Expenditure 3,054 2,369 3,105 3,538 9,156 13,168 10,874 11,832 9,601 19,313 15,977 7,183 6,224 11,486

(19%) (13%) (15%) (14%) (26%) (28%) (24%) (21%) (18%) (25%) (23%) (11%) (10%) (15%)

Total Expenditure 15,663 17,996 20,782 25,527 34,971 46,285 45,968 57,146 54,233 77,154 68,514 63,277 63,014 75,889

Note: Recurrent and capital expenditure as a proportion of the total expenditure is given in brackets. Source: Central Bank of Sri Lanka, Annual Report, various years.

Economic Imperative for Peace in Sri Lanka

181

than defeating the enemy. This strategy of controlling territory requires vast human resources. Hence, the labour-intensive military strategy has increased the number of personnel in the armed forces manifold during the past two decades (Table 4, row 4). The army, air force, and navy, which were just ceremonial forces in the early 1980s, transformed into fighting forces during the past two decades. According to a defence ministry source, at present there are about 300,000 personnel in the police, army, navy, and air force of Sri Lanka. This is about a quarter of the total number of personnel in the public sector. In 2001, total public sector employees were nearly 1.2 million. Out of the 300,000 personnel, only about 75,000 are in the police force and the rest in the armed forces. The total number of personnel in the police and armed forces comprise almost 2% of the total population (18.7 million) and 5% of the total labour force (6 million) of Sri Lanka in 2001. That is, for every 62 persons in Sri Lanka there is 1 person in the armed forces (including the police), which is a very high-ratio. In other words, there are 16 soldiers per 1,000 people, nearly three times higher than that shown in Table 4 above. The public sector labour (including in the armed forces) is expensive in Sri Lanka. Though the salaries in the public sector are relatively lower than in the private sector, the public sector employees do not pay income tax and enjoy a generous non-contributory pension. That is, public sector employees in Sri Lanka do not pay income tax and do not make any contribution to the state pension. Yet, they are entitled to receive 90% of their salary at the time of retirement as pension, which is one of the most generous pension schemes in the developing world. It is worthwhile mentioning that in India (e.g.,) the public sector employees do pay income tax and do contribute to the state pension. The average life expectancy of a person in Sri Lanka is presently around 70 years. Suppose a person joins the armed forces at the age of 20 years; the state has to pay salary, various allowances, pension, and widow/widower pension on account of that person for more than 50 years. This is a big burden on the economy. This burden is set to become more acute with the rapidly aging population of Sri Lanka. By 2010, about 20% of the Sri Lankan population is expected to be over 60 years old. The Sri Lankan public sector labour (including in the armed forces) is not cheap. Though the salary scales in the public sector are relatively lower than in the private sector, labour in the public sector is very costly to the exchequer because of low productivity. The public sector in Sri Lanka is overstaffed and inefficient (Budget 2002). In addition to the basic salaries, many public sector employees (including police and armed forces personnel) .

182

MUTTUKRISHNA SARVANANTHAN

are paid overtime payments and allowances such as ‘risk allowance’ that add-up to reasonable take home pay. In other words, although the gross incomes of the public sector and the private sector employees may show a big difference, the difference in net incomes may be far less. Despite the high economic cost of the labour-intensive military strategy adopted in Sri Lanka, the outcome of the civil war has been disappointing, which calls for a fundamental reconsideration of the labour-intensive military strategy. An analogy is drawn from the experience in Afghanistan. The United States with its technological superiority accomplished in a few months what the former Soviet Union could not do with its labour-intensive military strategy for over a decade in Afghanistan. Herein lays a cue for Sri Lanka. This does not imply that Sri Lanka could or should emulate the strategy of the United States; of course Sri Lanka cannot compete with the American technology. For a poor country like Sri Lanka, a capital-intensive military strategy can be equally prohibitive such as the present labour-intensive one because as mentioned above capital investments in the defence sector could have a 100% depreciation rate and thus become recurrent expenditures (Sen, 1992, p. 17). Besides, since Sri Lanka does not have a defence industry, physical and technological capital has to be imported, which would be very costly. However, investment in human capital rather than unskilled labour for the police and armed forces may pay better dividends. The labour-intensive military strategy has resulted in a high defence budget trap because even at a time of peace (such as the present one) the government is unable to make substantial cuts in defence spending as salaries, overtime payments, and various allowances (such as ‘risk allowance’) have to be paid. Thus, the anticipated ‘peace dividend’ in the aftermath of the indefinite ceasefire agreement has not materialised to any considerable extent (see also Sarvananthan, 2002b).

6. CONCLUSION The Sri Lankan economy is in dire straits. For the first time in the postindependence history, it recorded negative growth during 2001. The total public debt of Sri Lanka in 2001 was greater than the GDP of the country. The annual government revenue is not even sufficient to meet the annual recurrent expenditures of the government. Furthermore, the annual government revenue is not sufficient to make the repayments on public debt (World Bank, 2000). That is, even the public debt repayments have to be made with borrowed money.

Economic Imperative for Peace in Sri Lanka

183

One of the primary reasons for this predicament of the Sri Lankan economy is the galloping defence expenditure. The most important cause of the galloping defence expenditure is the labour-intensive military strategy pursued by successive governments. In comparison to many internal conflict-ridden countries, Sri Lanka’s defence expenditure is the largest in the world. Despite this record expenditure on defence, Sri Lanka has been less successful than some other comparable countries in combating internal conflict. A poor country like Sri Lanka cannot afford to spend such a high amount of its national income on defence for long. Therefore, after more than 20 years of ethnic conflict the time is opportune to do some soul-searching about the hitherto pursued military option to resolve this conflict, particularly the labour-intensive military strategy. The current state of the economy dictates a peaceful resolution of the long drawn-out ethnic conflict in Sri Lanka. Only a peace strategy could lift the island out of this economic quagmire.

NOTES 1. It is important to compare average growth rates for equal number of years in the conflict-time and pre-conflict time, unlike O’Sullivan (2001, p. 182). 2. Social expenditures in this paper include public expenditure on education, health, anti-poverty programmes (Samurdhi and social welfare) and relief, rehabilitation and reconstruction (which are products of conflict). 3. South Asia here comprises the largest five countries only, namely Bangladesh, India, Nepal, Pakistan, and Sri Lanka. 4. This is an underestimation compared to the figure estimated in Section 5 below (16 per thousand population) because according to this source the total number of armed forces personnel in Sri Lanka was 113,000 in 1998, which is a gross underestimation.

REFERENCES Arunatilake, N., Jayasuriya, S., & Kelegama, S. (2000). The economic cost of the war in Sri Lanka. Colombo: Institute of Policy Studies. Central Bank of Sri Lanka, Annual Report, various years. Central Bank of Sri Lanka, Annual Report 2001, Statistical Appendix Table 48, Colombo. Central Bank of Sri Lanka, Annual Report 2004, Statistical Appendix Table 2, Colombo. Deger, S. (1992). Military expenditure and economic development: Issues and debates. In: G. Lamb, & V. Kallab (Eds), Military expenditure and economic development: A symposium on research issues, Discussion Paper no. 185, World Bank, Washington, DC.

184

MUTTUKRISHNA SARVANANTHAN

Goonetileke (1998). Counting the costs of the war. In: K. Rupesinghe (Ed.), Negotiating peace in Sri Lanka: Efforts, failures, and lessons (pp. 335–345). London: International Alert. Government of Sri Lanka, Budget 2002, Colombo. Grobar, L. M., & Gnanaselvam, S. (1993). The economic effects of the Sri Lankan civil war. Economic Development and Cultural Change, 41(2, Hague), 395–406. Gunatilleke, G., et al. (2001). The cost of the war: Economic, social and human cost of the war in Sri Lanka. Colombo: National Peace Council. IMF. (2001). Sri Lanka, Country Report no. 01/71 (internet ed.), May, p. 13. Kelegama, S. (1999). Economic cost of conflict in Sri Lanka. In: R. I. Rotberg (Ed.), Creating peace in Sri Lanka. Washington, DC: Brookings Institution Press. Mahbub ul Haq Human Development Centre. (2005). Human Development in South Asia 2004 (pp. 257). Karachi: Oxford University Press. O’Sullivan, M. (1994). Economics and ethnic strife: The case of Sri Lanka. M.Sc. thesis, University of Oxford, Oxford. O’Sullivan, M. (1997). Household entitlements during wartime: The experience of Sri Lanka. Oxford Development Studies, 25(1, Oxford), 95–121. O’Sullivan, M. (2001). Sri Lanka: Civil strife, civil society, and the state 1983–1995, Chapter 7. In: F. Stewart & V. Fitzgerald (Eds), War and Underdevelopment II. Oxford: Oxford University Press. Rankaduwa, W., & Cooray, N. S. (1999). Economic impact of defense and non-defense spending: An empirical investigation. Upanathi, 10(1&2, Colombo), 102–115. Ravano, J. (2001). The economy of the Wanni: An analysis of the impact of restrictions. Unpublished draft report, Food Security Project for Conflict Affected Areas, Care International, Sri Lanka. Richardson, J. M., Jr., & de Samarasinghe, S. W. R. A. (1991). Measuring the economic dimensions of Sri Lanka’s ethnic conflict. In: R. Coughlan & S. W. R. A. de Samarasinghe (Eds), Economic dimensions of ethnic conflict. New York: St. Martin’s Press. Ross, L. A., & Samaranayake, T. (1986). The economic impact of recent ethnic disturbances in Sri Lanka. Asian Survey, XXVI(2), 1240–1255. Sarvananthan, M. (2002a). The international monetary fund in Sri Lanka: A critical dialogue. Contemporary South Asia, 11(1, Oxford), 77–87. Sarvananthan, M. (2002b). Doing business in the north & east province of Sri Lanka: Problems, opportunities, and challenges. Paper presented at the seminar on ‘Peace Process and the Business Community’ jointly organised by the Centre for Policy Alternatives and the Ceylon Chamber of Commerce on June 20th, Colombo, Sri Lanka. Seabright, P. (1986). Effects of conflict on economy in Northern Sri Lanka. Economic and Political Weekly, XXI(2, Mumbai), 78–83. Sen, S. (1992). Military expenditure data for developing countries: Methods and measurement. In: G. Lamb, & V. Kallab (Eds), Military expenditure and economic development: a symposium on research issues, Discussion Paper no. 185, World Bank, Washington, DC. Stockholm International Peace Research Institute, The SIPRI Military Expenditure Database, Stockholm. http://www.sipri.org/contents/milap/milex/mex_database1.html World Bank. (2000). Sri Lanka: Recapturing missed opportunities. Country Report, p. 22.

INDIA ENGAGES AFGHANISTAN: EXPANDING ITS INFLUENCE IN THE NEIGHBORHOOD Harsh V. Pant In a sign of Afghanistan’s deepening ties with India in the last few years, Hamid Karzai’s visit to India in April 2007 to attend the SAARC summit was his sixth since 2001, first as chairman of the Afghan Interim Administration and later as the President of Afghanistan. India has taken a lead role in the reconstruction of Afghanistan and enjoys a tremendous amount of goodwill in the country. Its role is seen as crucial for the longterm stability of Afghanistan, and India realizes that a stable, prosperous, and democratic Afghanistan is also in its strategic interests. This chapter examines the trends in India’s ties with Afghanistan in the last few years. A very brief historical overview of India–Afghanistan relations is followed by the delineation of trends in this bilateral relationship. Subsequently, an analysis of Indian strategic interests in Afghanistan is presented. Bilateral ties between India and Afghanistan span over centuries, given Afghanistan’s close links to the South Asian civilization historically. India has traditionally maintained strong cultural ties with Afghanistan, resulting in stable relations between the two states. Of course, imperial powers such as Great Britain and Russia used Afghanistan as a pawn in their ‘‘great game’’ of colonization, and given the contested boundary of British India and Afghanistan, the ties between the two remained frayed (Gregorian, 1969). But after independence, as the problem of the Durand line got Conflict and Peace in South Asia Contributions to Conflict Management, Peace Economics and Development, Volume 5, 185–201 Copyright r 2008 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1572-8323/doi:10.1016/S1572-8323(08)05012-1

185

186

HARSH V. PANT

transferred to Pakistan, India had no reason not to enjoy good ties with Afghanistan, especially given the adversarial nature of India–Pakistan relations. The Cold War also forced the two states to assume roughly similar foreign policy postures. While India was one of the founding members of the Non-Aligned Movement, Afghanistan also tried to follow an independent foreign policy and for some time at least was able to effectively play one superpower against the other, thereby garnering economic assistance from both sides. But given America’s close ties with Pakistan and the Soviet Union’s generosity in providing extensive military and economic aid, Afghanistan gradually fell into the Soviet orbit of influence, resulting in the Soviet invasion in 1979. The Non-Aligned Movement was divided on this issue and India was one of the few nations to support the Soviet invasion and occupation of Afghanistan, thereby damaging severely its prestige and credibility in the international community (Ghosh & Panda, 1983). The chaos that resulted in Afghanistan following Soviet occupation and their ultimate withdrawal in 1989 had far-reaching implications for global politics as well as Indian foreign policy. As the Cold War ended in the early 1990s, India was as disoriented as the rest of the world with the rapidity of events and faced a plethora of challenges on economic and foreign policy fronts. It had little time or inclination to assess what was happening in Afghanistan, and so when the Taliban, spawned by the chaos and corruption that dominated the post-Soviet Afghanistan, came to power in 1996, India was at a loss to evolve a coherent foreign policy response. India’s ties with Afghanistan hit their nadir through the Taliban’s 7-year rule when India continued to support the Northern Alliance by providing money and material (Coll, 2004). Also, after the Taliban took control of Kabul, the deposed Afghan communist leader and former President, Mohammad Najibullah, made unsuccessful attempts to escape to India. Though he was killed by the Taliban, his family managed to get away to India (Maitra, 2002). However, ever since the fall of the Taliban in 2001, India has pursued a pro-active Afghanistan policy and a broad-based interaction is taking place between the two states. This is also a time when Indian capabilities, whether political, economic, or military, have increased markedly, and India has become increasingly ambitious in defining its foreign policy agenda. In many ways, Afghanistan has emerged as a test case for an ambitious course that India seems to be charting in its foreign policy.

India Expanding its Influence in the Neighborhood

187

CONTEMPORARY TRENDS IN INDIA– AFGHANISTAN RELATIONS India’s engagement with Afghanistan readily became multi-dimensional after the defeat of the Taliban and the installation of an Interim Authority in 2001. This was reflected in an immediate upgradation of Indian representation in Afghanistan from Liaison Office to full-fledged Embassy in 2002. India actively participated in the Bonn Conference and was instrumental in the emergence of post-Taliban governing and political authority in Afghanistan. Since then, India’s main focus has been to support the Afghan government and the political process in the country as mandated under the Bonn agreement of 2001. It has continued to pursue a policy of high-level engagement with Afghanistan through extensive and wideranging humanitarian, financial, and project assistance, and participation in international efforts aimed at political reconciliation and economic rebuilding of Afghanistan. India’s relations with Afghanistan have steadily improved for a number of reasons. Unlike Pakistan, ties between India and Afghanistan are not hampered by the existence of a contiguous, and contested, border. Its support for the Northern Alliance against the Pakistan-backed Taliban in the 1990s strengthened its position in Kabul after 2001. Many members of the Alliance are members of the government or hold influential provincial posts. India has also done its best to restore the balance in its engagement with a range of different ethnic groups and political affiliations in Afghanistan. The balance was tilted toward the Tajik-dominated Northern Alliance during the 1990s as a counter to Pakistan-controlled hard-line Pashtun factions, led by the Taliban. India has used its vocal support for Karzai, an ethnic Pashtun educated in India, to demonstrate its keenness to revive its close ties with Pashtuns. During each of the visits to India by Afghanistan’s President, several important bilateral initiatives have been announced by the two sides. This includes a US $70 million financial commitment by India for the construction of Zaranj-Delaram road in Afghanistan; a Preferential Trade agreement between the two states; memoranda of understanding of cooperation in the fields of civil aviation; media and information, rural development, standardization, and education; and the establishment of a Joint Committee at the level of Commerce Ministers to conclude an EXIM Bank Line of Credit to the tune of US $50 million to promote business-tobusiness relations. Afghanistan has also sought Indian aid in agri-technology

188

HARSH V. PANT

that would halt desertification, deforestation, and water wastage in Afghanistan (Press Trust of India, 2006b). Afghanistan was self-sufficient in food till the 1970s, but since then the vagaries of war, drought, and mismanagement has wreaked havoc with the nation’s agricultural system. The Indian Prime Minister, Manmohan Singh, visited Afghanistan in 2005, the first, by an Indian head of government in 29 years. Indira Gandhi was the last Indian Prime Minister to visit Kabul in 1976. In an act of significant symbolism, Singh’s visit was also the first by a foreign head of state or government to last for more than a day since the ouster of the Taliban in 2001 as Singh brushed aside concerns for his security and demonstrated India’s special commitment to Afghanistan. This visit was aimed at reaffirming the commitment of both sides to reinvigorate the past ties and develop a new partnership as well as to mark the consolidation of traditional bonds between the two, which were severed during the rule of the Taliban. In consonance with the priorities laid down by the Afghanistan government, Indian assistance has focused on building human capital and physical infrastructure, improving security, and helping the agricultural and other important sectors of the country’s economy. India is apparently willing to even provide military assistance to Afghanistan, but the US has been unwilling to support this move, given Pakistan’s sensitivities. As a result, India’s support in this realm is limited to supplying Afghanistan with defensive military equipment, such as armored checkposts and watchtowers. India and Afghanistan have a long-standing record of technical and economic cooperation in various fields as prior to 1979 Afghanistan was the largest partner in India’s technical and economic cooperation program (Baruah, 2002). India has launched an extensive assistance program in Afghanistan since 2001 where it has pledged US $750 million toward reconstruction efforts (Sen, 2007), most of which is unconditional. Out of this, around US $270 million has already been utilized, and the projects range from humanitarian and infrastructure to health and rural development, training of diplomats, and bureaucrats. Delhi has emerged as one of Afghanistan’s top six donors, having extended a 500 million dollar aid package in 2001 and gradually increasing it ever since. Among the most high-profile of infrastructure projects currently undertaken by India is the reconstruction of the 220 km long Zaranj-Delaram road, which will enable Afghanistan to have access to sea via Iran and will provide a shorter route for Indian goods to reach Afghanistan. This project is being undertaken by India’s Border Roads Organization and is slated to

India Expanding its Influence in the Neighborhood

189

be over by 2008. The security of the Indian workers working on this project is being undertaken by a 300-strong paramilitary force provided by India itself. India is also investing in the rebuilding of institutional capacity in Afghanistan by providing training to more than 700 Afghans in various professions, including diplomats, lawyers, judges, doctors, paramedics, women entrepreneurs, teachers, officials in various departments of Afghanistan’s government, public officials, and cartographers. Afghanistan’s budding public transport system relies on Indian support as India is not only providing buses but also training traffic operators and other personnel related to transport. India’s commitment of one million tons of wheat aid to Afghanistan has been operationalized by converting part of it in the form of high-protein biscuits for school feeding program in Afghanistan through the channels of the World Food Program. India is also funding and executing the Salma Dam Power Project in Heart province involving a commitment of around US $80 million as well as the double circuit transmission line from Pul-e-Khumri to Kabul (Nambiar, 2004). Afghanistan’s new parliament building is also being constructed by India. India has agreed to adopt 100 villages in Afghanistan to promote rural development by introducing solar electrification and rain-water harvesting technologies. India has a fundamental interest in ensuring that Afghanistan emerges as a stable and economically integrated state in the region. Though Afghanistan’s economy has recovered significantly since the fall of the Taliban, with the real GDP growth rate exceeding 8% in 2006 (Central Intelligence Agency, 2006), it remains highly dependent on foreign aid and trade with neighboring countries. The Preferential Trade Agreement signed by India and Afghanistan gives substantial duty concessions to certain categories of Afghan dry fruits when entering India with Afghanistan allowing reciprocal concessions to Indian products such as sugar, tea, and pharmaceuticals. Kabul wants Indian businesses to take advantage of the low tax regime to help develop a manufacturing hub in areas such as cement, oil and gas, electricity, and services including hotels, banking, and communications. India also piloted the move to make Afghanistan a member of the South Asian Association of Regional Cooperation (SAARC) with the hope that with the entry of Afghanistan into the SAARC issues relating to the transit and free flow of goods across borders in the region can be addressed, thereby leading to greater economic development of Afghanistan and the region as a whole. Moreover, South Asia will be able to reach out to Central

190

HARSH V. PANT

and West Asia more meaningfully with Afghanistan as a member of the SAARC. It has been estimated that given Afghanistan’s low trade linkages with other states in the region, its participation in the South Asian Free Trade Area (SAFTA) would result in trade gains of $2 billion to the region with as much as $606 million accruing to Afghanistan (Srinivasan, 2007).

INDIAN INTERESTS IN AFGHANISTAN Given that a politically and economically stable Afghanistan is a strategic priority for India, India maintains that the ongoing effort to help Afghanistan emerge from war, strife, and privation is its responsibility as a regional power. Moreover, the consolidation of hard-won gains since the fall of the Taliban is also a strategic objective for Indian foreign policy. India has a range of interests in Afghanistan that it would like to preserve and enhance, and it is toward this end that it has expanded its diplomatic energy in recent years.

COUNTERING PAKISTAN To a great extent, India’s approach toward Afghanistan is a function of its Pakistan policy. It is important for India that Pakistan does not get a foothold in Afghanistan, and so historically India has attempted to prevent Pakistan from dominating Afghanistan. India would like to minimize Pakistan’s involvement in the affairs of Afghanistan and to ensure that a fundamentalist regime of the Taliban variety does not take root again. Pakistan, on the other hand, has viewed Afghanistan as a good means of balancing out India’s preponderance in South Asia (Weinbaum, 1991). Good India–Afghanistan ties are seen by Pakistan as detrimental to its national security interests as the two states flank the two sides of Pakistan’s borders. A friendly political dispensation in Kabul is viewed by Pakistan as essential to escape the strategic dilemma of being caught between a powerful adversary in India in the east and an irredentist Afghanistan with claims on the Pashtun dominated areas in the west (Hussain, 2002). Given its Pashtunethnic linkage with Afghanistan, Pakistan considers its role to be a privileged one in the affairs of Afghanistan. Given these conflicting imperatives, both India and Pakistan have tried to neutralize the influence of each other in the affairs of Afghanistan.

India Expanding its Influence in the Neighborhood

191

While Pakistan, along with Saudi Arabia and the United Arab Emirates, was the main supporter of the Taliban, India, along with Russia and Iran, threw its weight behind the Northern Alliance. As a consequence, Pakistan’s influence in Afghanistan peaked with the coming to power of the Taliban in 1996. It viewed the Taliban as a means of controlling Afghanistan and undercutting India’s influence. Pakistan has long believed that it can gain ‘‘strategic depth’’ vis-a`-vis India by influencing the domestic politics of Afghanistan, something Islamabad felt it achieved during the 1980s and the 1990s. It is keen to prevent its ‘‘strategic encirclement’’ as a result of closer Delhi–Kabul ties. However, the perceived gains of the last two decades have been increasingly under threat since the overthrow of the Taliban in 2001. After the terrorist attacks in the United States, President Pervez Musharraf had to choose between support for the US-led invasion of Afghanistan and its ‘‘war on terrorism’’ or isolation as a backer of radical Islamic extremism. Musharraf promptly signed Pakistan up as an ally of Washington. This committed Pakistan to supporting efforts to stabilize Afghanistan and to strengthen the administration of President Hamid Karzai. Considerable doubts have emerged in recent times about Islamabad’s capacity, and commitment, to crack down on militants. Kabul is deeply suspicious of Pakistan, on whom its security is largely dependent. Pakistan’s InterServices Intelligence (ISI) agency is linked to the resurgence of the Taliban, whose leadership is thought to be operating from tribal border regions. The rejuvenation of the Taliban has potential benefits for Pakistan in bolstering its role as a frontline state in the war on terrorism, thereby securing continued engagement from the United States. Musharraf has been unable to dismantle the infrastructure that has provided funding, training, and arms for the Taliban, though the ISI has been brought under more direct control since 2001. The security problems in Afghanistan can be linked to the military’s continuing position as the predominant force in Pakistan, an institution that has, since the 1990s, viewed the Taliban as a means of controlling Afghanistan and undercutting India’s influence there (Haqqani, 2005). Having focused exclusively on the Taliban, it is struggling to abandon it now, and the tendency in the higher echelons of the Pakistani government and military to turn a blind eye to jihadist violence if that violence is focused outward on Afghanistan, Kashmir, or other parts of India remains as potent as ever. Kabul has repeatedly blamed Islamabad for a resurgence of the Taliban over the past two years. The exchange of bitter rhetoric has intensified, with Karzai warning that a failure to bring peace to Afghanistan would be

192

HARSH V. PANT

disastrous for the whole region and accusing Pakistan of trying to ‘‘enslave’’ the Afghan people. The deterioration in relations has also manifested itself in a dispute over suggestions from Pakistan that it will seal its 1,510 mile-long border with fences and mines. Afghanistan, which does not recognize the border, reacted strongly against the plan, arguing that it will divide families and will not end cross-border terrorism. Islamabad has insisted that 3,000,000 Afghan refugees should return home as one way to prevent Pakistan being used as a haven by extremists. Pakistan also suggested that drug traffickers from Afghanistan (which produces 90% of the world’s heroin supply) are using their influence to campaign against the border plan. Pakistan’s frustration at the loss of political influence in Afghanistan after the ouster of the Taliban has been compounded by the welcoming attitude of the Karzai government toward India. Karzai may not be deliberately crafting a Delhi–Kabul alliance against Islamabad but he is certainly hoping to push Pakistan into taking his concerns seriously. In a sign of its growing influence in Afghanistan, India has opened consulates in Herat, Mazare-Sharif, Kandahar, and Jalalabad, in addition to its embassy in Kabul. Pakistan has accused India’s Kabul embassy of spreading anti-Pakistani propaganda and views the establishment of the consulates as a way for Delhi to improve intelligence-gathering against it. Islamabad is also wary of Afghanistan or India exerting influence on restive populations in its border regions such as Baluchistan and the North West Frontier Province (NWFP). Pakistan claims that much of the funding and arms for the Baluch tribal leaders, grouped under the umbrella of the Baluchistan Liberation Army, are funneled through the Indian consulates in Jalalabad and Kandahar. Pakistan has worked hard to limit India’s involvement in Afghanistan. It made transit rights to Afghanistan conditional upon a resolution of the Kashmir issue. By not allowing India transit rights to Afghanistan through its territory, Pakistan has sought to leverage Afghanistan’s reliance on the Karachi port as its only gateway to the world. But Kabul has pushed back and has used Iran and India to find an alternative route so as to reduce its historic dependence on Pakistan for transit trade. Though it has failed to achieve its objectives in the economic realm, it has been successful in limiting India’s military involvement in Afghanistan. It did not even allow India to send a few hundred military transport vehicles to Kabul, which India had to ultimately route through Iran (Mohan, 2003). Despite Pakistan’s objections, however, Afghanistan has sought Indian assistance in the defence sector. The Afghan Air Force’s fleet of MiG 21

India Expanding its Influence in the Neighborhood

193

fighters and other defence equipment, mostly of Russian and Soviet origin, has been serviced by Indian technicians. India also played an important role in the reorganization of the Afghan National Army and hopes that it will help in the long-term evolution of Indo–Afghan military ties (Bedi, 2003). India has now stationed the Indo-Tibetan Border Police (ITBP) commandos in Afghanistan for the protection of its personnel employed by the Border Roads Organization (BRO). This is the first time since its independence that India has its military personnel deployed in Afghanistan, something that has obviously not gone down well with Pakistan (Cherian, 2006). But with the Taliban openly threatening Indians working in various projects in Afghanistan and after the death of a few of its nationals, India had little choice as around 3,000 Indian nationals are engaged in infrastructure construction, capacity building, and developments projects in Afghanistan. Despite the public pronouncements of the US government in support of Pakistan, the sharply rising Western casualty rates in Afghanistan are not only generating skepticism in the West about Pakistan’s efforts to rein in the Taliban but are also encouraging a rethink about Pakistan’s relationship with the West and its role in the global war on terror (Jones, 2007). In a clear indication that the US is turning up the pressure on Pakistan to crack down in its tribal areas, the former US Director of National Intelligence, John Negroponte, cautioned the US Congress that Pakistan remains a major source of Islamic extremism, and Al Qaeda leaders have found a sanctuary in secure Pakistani hideouts. Moreover, according to him, the Taliban is back to rebuilding itself in Pakistan with full vigor (Negroponte, 2007). This will definitely force India to redouble its efforts toward preventing any comeback of the Taliban, and Indo–Pak competition for influence will, in all likelihood, continue. While some have suggested that increasing trade and transit between India and Pakistan can reduce their sense of political rivalry in Afghanistan (Mohan 2004), it is not clear if the two sides would be willing to give up their power struggle so easily. After all, it was as far back as 1979 that India had proposed that India and Pakistan should cooperate on Afghanistan to stabilize the South Asian security environment but the global political realities soon took over with Pakistan emerging as a frontline state in the US-led struggle against Soviet expansionism and India gravitating toward the other side. Cold War may have ended in 1991 but power politics continues and in one form or another will continue to shape India’s attitudes toward Afghanistan.

194

HARSH V. PANT

CONTAINING ISLAMIC EXTREMISM India’s other major interest is to make sure that Islamic extremism remains under control in its neighborhood, and its struggle against Islamic extremism is also closely intertwined with the rise of extremism in Pakistan and Afghanistan. Pakistan has long backed separatists in Jammu and Kashmir in the name of self-determination, and India has over the years been a major victim of the radicalization of Islamist forces in Kashmir, which have been successful in expanding their network across India. Any breeding ground of radical Islamists under the aegis of Pakistan has a direct impact on the security of India, resulting in a rise in infiltration of terrorists across borders as well in attacks. It is vital for both India and Afghanistan that the latter would never again emerge as a safe haven for terrorism and extremism. Ever since the withdrawal of the former Soviet Union from Afghanistan, there has been a gradual growth of the Salafists around the globe, and India has been no exception where this movement has made use of the nation’s liberal environment to preach and operate a radical version of Islam to sections of the 170-million strong Indian Muslim populace at a time when they have been particularly vulnerable due to the rise of Hindu nationalism. The Salafist ideology has been nurtured in the ultra-conservative environs of Saudi Arabia and has been exported to the rest of the world ever since the boom in Saudi oil revenues in the 1970s. The founder of the Saudi Kingdom, King Abd al-Aziz ibn Saud, based his rule on the Salafi doctrine and this remains the ideology of Saudi Arabia today (Haykel 2001). A combination of factors in the 1970s made it possible for the Saudis to promote their radical version of Islam around the world. This included the hike in oil prices that provided the resources necessary to penetrate globally; the coming to power in Pakistan of General Zia-ul-Haq, who put his weight behind the Islamist political parties and their madrassas; and the Soviet invasion of Afghanistan in 1979, which brought thousands of volunteers into the country to fight the ‘‘infidels.’’ By the time the Soviet Union withdrew from Afghanistan, there was an army of young radicals who had been converted to the cause of the jihadist movement (Allen, 2006). An ideology of violence predicated on the distortion of Islamic tenets spread insidiously across the crescent from West Asia through Afghanistan– Pakistan and was remarkably successful in attracting converts. A friendly Afghanistan where religious extremism continues to flourish is seen by Pakistan as essential to keep the pressure on India in Kashmir by providing a base where militants could be trained for fighting against the

India Expanding its Influence in the Neighborhood

195

Indian forces. The mujahideen fighting in Kashmir have not only drawn inspiration from the Afghan resistance against the Soviets but also has drawn resources and material support from Pakistan (Rashid, 2001). Kashmiri militants were among the thousands of ‘‘volunteers’’ from various Islamic countries that participated in the war against the Soviet forces. They went back indoctrinated in a version of Islam that destined their victory over the ‘‘infidels’’ as well as with important knowledge of guerrilla warfare (Rais, 1993). India rightly perceived that the victors of the mujahideen against the Soviet Union would fundamentally alter the direction of Islamic extremism as Afghanistan would end up playing a crucial role in the shaping of Islamic geopolitics sitting as it does astride the Islamic heartland involving South and Central Asia as well as the Middle East. While India would like to ensure that Afghanistan does not become a springboard for terrorism directed against India once again, the recent resurgence of the Taliban and Pakistan’s ambivalent approach toward this growing menace remains a major headache for India. In recent months, the pattern of medieval Islamist ideology challenging the writ of the state is more evident along the Pakistan–Afghanistan border where the resurgence of Afghanistan is manifest in myriad ways. The Taliban forces have attacked Indian nationals working in reconstruction and development projects in different parts of Afghanistan in an effort to intimidate the Indian government. With the leadership of Al Qaeda and the Taliban operating from Baluchistan, the NWFP, and the Waziristan area of Pakistan, these attacks can only be expected to increase, especially as they continue to enjoy Pakistan’s tacit support due to its concerns about the growing Indian influence in Afghanistan. Musharraf has refused to unequivocally renounce the terrorist option as far as Kashmir and Afghanistan are concerned (Baabar, 2006). There is significant evidence that training camps of various militant groups continue to operate in different parts of Pakistan (Press Trust of India, 2006a). The political-military establishment in Pakistan have not yet cleared the cobwebs in their minds – in thinking through, and operationalizing, a policy of no tolerance toward the jihadis (Weaver, 2002). As the operatives and partisans of Al Qaeda and the Taliban move about with ease and propagate their ideology even in those parts of Pakistan where the federal government exercises real control, these organizations face little difficulty in recruiting cadres or raising funds. The resurgence of the Taliban is being supported by Pakistan’s intelligence agencies not only because they are under the spell of the forces of radical Islam but also because of their entrenched opinion that the jihadist movement allows them to assert greater influence on Pakistan’s

196

HARSH V. PANT

vulnerable Western flank. Musharraf has yet to deliver meaningfully on his promise of reforming madrassas so that none of them can function as training schools for jihadis. From the beginning of the US-led war on Al Qaeda and the Taliban, it has been clear that Islamabad would not be able to compartmentalize the jihadi groups. The strategy of keeping the Kashmir terrorist groups active while clamping down on outfits operating in Afghanistan was never going to work, for the simple reason there was no question of those who believed they were fighting a holy war of terror accepting a diktat that they should cross only one national border or fight only one enemy (Haqqani, 2005). India will be forced to respond more aggressively if the Islamist forces continue to gain momentum in and around Afghanistan because the last time similar developments took place, India had to pay a heavy price for its nonchalance.

A BRIDGE TO CENTRAL ASIA Afghanistan is also viewed as a gateway to the Central Asian region where India hopes to expand its influence. Central Asia is crucial for India not only because of its oil and gas reserves that India wishes to tap for its energy security but also because other major powers such as the US, Russia, and China have already started competing for influence in the region. The regional actors view Afghanistan as a potential source of instability even as their geopolitical rivalry remains a major cause of Afghanistan’s troubles (Rashid, 2001). India was forced to increase its military profile in Central Asia after the diplomatic humiliation it had to endure in 1999 when an Indian Airlines flight from Kathmandu was hijacked by Pakistan-backed terrorists to Kandahar in southern Afghanistan. India had to negotiate a deal with the Taliban that involved the release of the aircraft in exchange for three hardened terrorists held by India. India then decided to set up its first military base abroad in Farkhor in Tajikistan, close to the Afghan border, that was used to provide assistance to the Northern Alliance fighters and later to provide assistance to the post-Taliban government in Kabul (Bedi, 2002). India has used Tajikistan as a base for ferrying humanitarian and reconstruction aid to Afghanistan. India’s base in Ayni in Tajikistan represents a major element in India’s effort to promote stability in Afghanistan and to enhance New Delhi’s ability to contain Islamic terrorism both in South Asia and Central Asia. Afghanistan’s leaders have

India Expanding its Influence in the Neighborhood

197

also expressed an interest in acting as a ‘‘land bridge’’ between India and Central Asia. India’s interest in the Turkmenistan–Afghanistan–Pakistan– India gas pipeline is also predicated upon stability and security in Afghanistan. Moreover, India has to keep an eye on various other states that have started expanding their own influence in and around Afghanistan. Iran has also been increasing its influence in Afghanistan, using its oil money to realize its self-image as an ascendant regional power. Iran’s strategy toward Afghanistan seems geared toward hastening the withdrawal of American forces, preventing the Taliban from gaining power, and trying to keep Afghanistan under Tehran’s sway. It played a major role in restarting the post-Taliban political process in Afghanistan and has pledged $560 million in aid and loans to Afghanistan (Rohde, 2006). But Iran’s role has become more complicated in Afghanistan more recently. As its relations with the US have become more confrontational, there have been some indications that certain sections of the Iranian military, especially the Revolutionary Guards, may be arming the Taliban so as to weaken the American military in Afghanistan. The coalition forces in Afghanistan have captured some shipments of Iranian made weapons that were being supplied to the Taliban (Gordon, 2007). Historically, Iran has also competed with Pakistan for influence in Afghanistan. Iran has not taken kindly to Pakistan’s close ties with the US and Saudi Arabia. It had also been suspicious about Pakistan’s intentions in establishing and supporting a fundamentalist Sunni regime in Kabul. Shia–Sunni strife in Pakistan has also provoked Iran to provide clandestine support to its co-religionists, the Shias, in Pakistan. Though the A. Q. Khan network also helped Iran in its drive toward nuclear weaponization (Braun & Chyba, 2004), Iran has not been very comfortable with the idea of Pakistan being the sole Islamic state with nuclear weapons. Pakistan remains concerned about deepening India–Iran ties (Pant, 2008, pp. 113–129) and Afghanistan’s gravitation toward such an axis. For many in Pakistan, India is pursuing a well-crafted strategy of encircling Pakistan and keeping it out of Afghanistan and Central Asia altogether. India’s building of roads in Afghanistan is seen as particularly worrisome as it will increase the influence of India and Iran and boost Afghanistan’s connectivity to the outside world. India also hopes that the road link through Afghanistan and Iran will open up markets for its goods in Afghanistan and beyond in Central Asia. As the geopolitical importance of Central Asia has increased in recent years, all the major powers have been keen to expand their influence in the region, and India is no exception. It shares many of the interests of other major powers such as the US, Russia, and China vis-a`-vis Central Asia,

198

HARSH V. PANT

including access to Central Asian energy resources, controlling the spread of radical Islam, ensuring political stability, and strengthening of regional economies. But unlike China and Russia, its interests converge with that of the US in Central Asia and some have even suggested that it is in US interests to have a greater Indian presence in Central Asia to counter growing Chinese or Russian involvement (Blank, 2007). China and Russia are not only competing among themselves for influence in the region but are also trying to minimize US presence. The Shanghai Cooperation Organization (SCO) is seen by them as an instrument to control the expanding US influence in the region. While Russia might be sympathetic to Indian concerns in Central Asia, China will be reluctant to see India emerge as a major player in the region. Given China’s close ties with Pakistan, China would not be too pleased with growing Indian influence in Afghanistan and broader Central Asia. China has not engaged as meaningfully in a post-Taliban Afghanistan as it could, given its resource capabilities and as it should, given that it faces a restive Uighur populace in Xinjiang. A radicalized Afghanistan is not in China’s interests, especially as some Uighurs were involved with Taliban and Al Qaeda. For India, Central Asia is crucial in so far as its strategic capabilities vis-a`-vis China are concerned, and India’s aggressive foreign policy in Central Asia is an attempt to outflank growing Chinese influence in South Asia. Some see India’s attempt to build roads linking Afghanistan and Central Asia and Iranian ports as a response to China’s building up of a deep water-port in Gwadar as a gateway to global markets for Central Asian resources (MacDonald, 2003). However, while coordinating with the US in Afghanistan, India also intends to maintain cooperation with its traditional allies in the region such as Russia and Iran. This will force some tough diplomatic choices on India as US–India ties get more adversarial and competition increases between Russia and the US to increase their influence in the region in the coming years.

EXPANDING REGIONAL INFLUENCE A major factor behind India’s pro-active Afghanistan agenda has been India’s attempt to carve out for itself a greater role in regional affairs, more in consonance with its rising economic and military profile. India wants to establish its credentials as a major power in the region that is willing to take responsibility for ensuring stability around its periphery. By emerging as a major donor for Afghanistan, India is trying to project itself as a significant

India Expanding its Influence in the Neighborhood

199

economic power that can provide necessary aid to the needy states in its neighborhood. Moreover, India’s long-term ambition to emerge as a ‘‘great power’’ will be assessed by the international community in terms of its strategic capacity to deal with the instability in its own backyard. It has been contended that India’s ‘‘pro-active foreign policy vis-a`-vis Afghanistan has been predicated upon New Delhi’s keenness to be of use to American regional policy’’ to the detriment of a traditional ‘‘independent’’ Indian approach toward its neighbors (Bhadrakumar, 2005). It is not clear, however, what alternative policy India can pursue given that America’s ‘‘war on terror’’ – its strategic priority – has at its center the goal of achieving Afghanistan’s stabilization. No doubt, India’s interests are best served in helping the US achieve that aim. In the long term, though, India will have to make some difficult choices, especially if the US commitment to create an enduring environment in Afghanistan wanes, and it leaves before achieving its long-term objectives. India will find the going tough if the US decides to revert back to its policy of the 1990s when despite convergent security interests, it failed to develop an effective counter-terrorism partnership with India (Coll, 2004). Some have explained the US policy of continuing to tolerate Pakistan’s complicity with the Taliban by virtue of the fact that the US does not consider the surviving elements of the Taliban as a threat to its homeland but just a menace to the peace and stability of Afghanistan (Raman, 2004). If the US refuses to put pressure on Pakistan adequately so as to force it to take a more responsible stand vis-a`-vis Afghanistan, India might be forced to take a more independent approach that relies less on the US. But given the current trends in Indo–US ties, this seems highly unlikely in the short to middle term (Pant, 2008, pp. 19–37).

CONCLUSION The situation in Afghanistan remains grim with the US even warning that Afghanistan risked becoming a ‘‘failed state’’ if the security situation is not handled more seriously by the West. The failure of the European states to provide NATO with an adequate number of soldiers to carry out the expanded Afghan security mission it has taken on does not augur well for the credibility of the Western alliance against a highly tenacious adversary. But the military is just one of the means that is needed to tackle the menace of resurgent Taliban in Afghanistan. The pace of reconstruction and development also needs to pick up significantly if the international community wants the ordinary citizens of Afghanistan to have some faith

200

HARSH V. PANT

in its endeavor to transform social and economic structures on the ground. The political institutions also need to connect better with the demands of the ordinary citizens, and reforms in the security apparatus of the country need some serious attention. Hamid Karzai is straining to hold his country together but is increasingly losing popular support because of growing violence, corruption, mal-governance, and an inability to demonstrate tangible progress since the fall of the Taliban. The US and allies are unfortunately too bogged down in the day-to-day struggle for security that any long-term reforms will only have to take a backseat. And this does not augur well for a nation that is so crucial to winning the ‘‘war against terror.’’ This is not good news for India that views a stable, democratic, and prosperous Afghanistan as necessary for its own as well as the region’s security. India has an interest in a stable Afghanistan ruled by a regime that is not only fully representative of the ethnic and cultural diversity of the country but also is capable of leading down the path to economic development and social stability, thereby enhancing regional stability. Afghanistan faces major developmental challenges, and India has promised to support it in the path toward prosperity and development. The rich legacy of India–Afghanistan relations goes back to the earliest times, to well before Christ. Therefore, for India, stability and development in Afghanistan will have to be based on a revival of the age-old commercial, social, cultural, and political ties that made Afghanistan the crossroads of East and West Asia, South Asia, and Central Asia. India is following an ambitious foreign policy agenda vis-a`-vis Afghanistan as it tries to shed its inward-looking strategic insularity to carve out a larger regional role for itself. Its success, or lack thereof, will have serious consequences for India’s stature in the region and the international system at large.

REFERENCES Allen, C. (2006). God’s terrorists: The Wahhabi cult and the hidden roots of modern jihad. London: Little, Brown. Baabar, M. (2006). The call of the camps. Outlook, August 28. Baruah, A. (2002). Karzai keen on Indian expertise. The Hindu, January 22. Bedi, R. (2002). India and Central Asia. Frontline, September 14. Bedi, R. (2003). Strategic realignments. Frontline, April 17. Bhadrakumar, M. K. (2005). The Taliban turns its attention on India. The Hindu, November 28. Blank, S. (2007). US interests in Central Asia and the challenges to them. Carlisle, PA: Strategic Studies Institute, US Army War College.

India Expanding its Influence in the Neighborhood

201

Braun, C., & Chyba, C. F. (2004). Proliferation rings: New challenges to the nuclear nonproliferation regime. International Security, 29(2), 5–49. Central Intelligence Agency (2006). Afghanistan. The World Factbook. Available at http:// www.cia.gov/cia/publications/factbook/geos/af.html Cherian, J. (2006). Killed in cold blood. Frontline, May 19. Coll, S. (2004). Ghost wars: The secret story of the CIA, Afghanistan, and Bin Laden, from the Soviet invasion to September 10, 2001. New York, NY: The Penguin Books. Ghosh, P. S., & Panda, R. (1983). Domestic support for Mrs. Gandhi’s Afghanistan policy: The Soviet factor in Indian politics. Asian Survey, 23(3), 261–263. Gordon, M. R. (2007). US says Iranian arms seized in Afghanistan. New York Times, April 18. Gregorian, V. (1969). The emergence of modern Afghanistan. Stanford, CA: Stanford University Press. Haqqani, H. (2005). Pakistan: Between mosque and military. Washington, DC: Carnegie Endowment for International Peace. Haykel, B. (2001). Radical Salafism. The Hindu, December 1. Hussain, R. (2002). Pakistan’s relations with Afghanistan: Continuity and change. Strategic Studies, 22(4)Available at http://www.issi.org.pk/journal/2002_files/no_4/article/3a.htm Jones, S. (2007). Pakistan’s dangerous game. Survival, 49(1), 15–32. MacDonald, J. A. (2003). Rethinking India’s and Pakistan’s regional intent. The National Bureau of Asian Research Analysis, 14(4), 5–26. Maitra, R. (2002). Indian military shadow over central Asia. Asia Times Online, September 10. Available at http://www.atimes.com/atimes/South_Asia/DI10Df01.html Mohan, C. R. (2003). India’s new road to Afghanistan. The Hindu, September 6. Mohan, C. R. (2004). Trade-off on transit. The Hindu, August 12. Nambiar, V. K. (2004). Statement on the situation in Afghanistan at the Security Council. April 6. Available at http://www.un.int/india/2004/ind910.pdf Negroponte, J. (2007). Annual threat assessment of the director of national intelligence. Testimony to the Senate Select Committee on Intelligence, January 11, 2007, available at http://intelligence.senate.gov/070111/negroponte.pdf Pant, H. V. (2008). Contemporary debates in Indian foreign and security policy: India negotiates its rise in the international system. New York: Palgrave Macmillan. Press Trust of India. (2006a). Militants camps continue to run in Pakistan. August 10 Press Trust of India. (2006b). India–Afghanistan blossom amidst turmoil. December 27. Rais, R. B. (1993). Afghanistan and the regional powers. Asian Survey, 33(9), 915–916. Raman, B. (2004). Terrorism in Afghanistan and Central Asia, South Asia Analysis Group, Paper No. 1172. Available at http://www.saag.org/papers12/paper1172.html Rashid, A. (2001). Taliban: The story of Afghan Warlords. Oxford: Pan Books. Rohde, D. (2006). Iran is seeking more influence in Afghanistan. New York Times, December 27. Sen, N. (2007). Statement on the situation in Afghanistan at the Security Council. March 20. Available at http://www.un.int/india/2007/ind1319.pdf Srinivasan, G. (2007). Afghanistan’s entry to SAARC will lead to $2 billion gain for subcontinent. The Hindu Business Line, March 29. Weaver, M. A. (2002). Pakistan: In the shadow of jihad and Afghanistan. New York, NY: Farrar, Strauss and Giroux. Weinbaum, M. G. (1991). Pakistan and Afghanistan: The strategic relationship. Asian Survey, 31(6), 498–499.

This page intentionally left blank

DYNAMICS OF POLITICAL TRANSITION IN MYANMAR: IMPEDIMENTS AND ALTERNATIVE FUTURES B. M. Jain Since the military coup in 1962, the authoritarian regime in Myanmar has been resorting repressive means, in one way or another, to derail the process of power transition through democratic means. Nevertheless, due to mounting domestic as well as international pressures, military rulers announced a roadmap to democracy in August 2003 by agreeing to draft a new constitution. There is still a long way to go. What makes it an uphill task, especially for the opposition parties in Myanmar, is to garner and consolidate support from the domestic constituency in order to reconstruct the nation-state along a democratic path. This paper aims to examine the dynamics of political transition in Myanmar in a holistic perspective in order to find out whether mobilization of various opposition parties can facilitate the setting up of a constitutional democracy. This paper will evaluate a myriad of challenges and dilemmas facing minority communities to help promote democratic forces from the ‘‘bottom up.’’ Besides, the ethnic question is at the ‘‘heart’’ of Myanmar’s political turmoil. Given this, the paper is divided into three parts. The first part will deal with theoretical perspectives on nation-state building within a framework of Conflict and Peace in South Asia Contributions to Conflict Management, Peace Economics and Development, Volume 5, 203–211 Copyright r 2008 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1572-8323/doi:10.1016/S1572-8323(08)05013-3

203

204

B. M. JAIN

globalization of democracy and further explore whether the framework fits in the domestic setting of Myanmar. The second part will examine the role of ethnic nationalist parties and civil society networks in producing a conducive environment for boosting democratic forces at the grassroots level, involving ethnic nationalities that constitute 30–40% of the population. Finally, it spells out futuristic scenarios on the basis of persisting political trends in Myanmar. The increasingly grassroots demand for transition from a military or authoritarian regime to democracy in Myanmar needs to be viewed in the broader perspective of nation-state building in order to enlarge human freedom and human choices unconstrained by the constrained vision of selfmotivated and self-centric military elites who tend to perpetuate their ironhanded rule in order to sustain themselves in power. It is a fact that Third World countries fought against colonial forces for freedom, dignity, and democratic rights. But paradoxically enough after the withdrawal of colonial masters from their soil the power-hungry leaders without any commitment to the community embarked on an offensive enterprise of denying freedom and autonomy to their own people. The military got itself entrenched in power and went on to create invulnerable barriers to prevent grassroots participation in state affairs as well as deprive them of realizing their ‘‘self-expression’’ – cultural freedom and identity. The problem has been further compounded by military regimes indulging in a socio-cultural divide along narrow ethnic and religious lines. For centuries, the people of diverse cultural identities had coexisted peacefully without any fear of loss of lives, cultural identity, or intellectual freedom for their self-fulfillment – a necessary condition for intellectual enlightenment and quality of life (Kothari, 1987). For restoration of the older tradition of common good, the state will have to be a positive instrument for not only the sheer survival of ethnically diverse minority communities, but also a catalyst agent of social cohesion and collective welfare through a political arrangement of power-sharing with ethnic minority communities. Some scholars such as Dahl (1989) talk of ‘‘consociational democracy’’ as a pragmatic alternative for political stability and good governance by renegotiating complex and contradictory interests of diverse political parties representing the interests of minority ethnic groups. When we talk of ‘‘democracy’s third wave’’ (Huntington, 1991) in the post-Soviet era, we need to bear in mind that the military regimes are ‘‘closed regimes,’’ ‘‘regimes of censorship or strong and unfettered secret services’’ (Hoffman, 2004, p. 1035), and that it is not an easy task to bring

Dynamics of Political Transition in Myanmar

205

about democratic transformation through political or peaceful process. The regime change in Iraq by the United States, even against the desire of the international community for instance, is not an ideal example or a precedent to be emulated in case of governing institutions such as in Myanmar. It is the people of Myanmar who have the legitimate right to overthrow or change the military regime through a long arduous political process to bring in democracy. In this regard, democratic movement was launched by Aung San Suu Kyi as far back as 1988. Given the above backdrop, I attempt to examine and evaluate whether it will be possible for the ethnic nationality groups and political leadership to bring about a transition from military rule to democratic governance in Myanmar through non-violent struggle. A host of questions do arise. Can the ‘‘world wide resurgence of democracy’’ (Plattner & Smolar, 2000) act as a catalyst agent in producing essential conditions for promoting the causes of democracy in Myanmar? To what extent will the multilateral diplomacy be helpful in boosting pro-democratic forces in Myanmar? What role do we envisage for international institutions such as the United Nations (UN), World Bank, International Monetary Fund (IMF), and NGOs like Amnesty International in facilitating a peaceful transition from the military rule to democracy? It is quite difficult to find a precise answer to each of these questions raised above, for various political theorists have addressed the problem of planting democracy in military regimes from a myriad of dimensions. For instance, Adam Rotfeld and Robert Kagan (Plattner & Smolar, 2000) address the role of external actors in promoting democracy. For Rotfeld, the increase in intrastate conflicts, the problem of ‘‘failed states’’ that cannot control their own territories and the growing recognition of human rights and democratization essential to hopes for international peace and security all call for international action (Platter & Smolar, Introduction). Robert Kagan holds the view that democracy is intimately connected to the ‘‘benevolent hegemony’’ of the United States since it has been able to bring about ‘‘global democratic revolution.’’ In a similar tone, Zbigniew Brzezinski identifies linkage between the US global power and the ‘‘global appeal for democracy.’’ These views are not largely shared by the Third World, including some advanced democratic states of Europe such as France and Germany, which are also opposed to the US unilateralism dislodging regimes through military means. Huntington is also of the viewpoint that it is an excruciating task for America to help ‘‘achieve democracy in the remaining undemocratic countries: China and related East Asian societies, the Muslim world’’ (Huntington, 2000). In this regard, it

206

B. M. JAIN

may be relevant to quote Immanuel Kant who says, ‘‘to recognize that autonomy is the highest human good, humans have to disentangle themselves from the ‘leading strings’ by which the ‘guardians’ – priests, lawyers, and rulers – have made them ‘domesticated animals’ ’’ (Pagden, 2005). What Kant intends to convey is that only enlightened can create a state that recognizes human autonomy. But how? Kant is silent on this. Whereas, Albert P. Blaustein writes: ‘‘States should be based on civic, rather ethnic or national principle. That is, all citizens should have equal standing in the society. There should not be ‘insiders’ and ‘outsiders.’ If the state is not largely homogenous in terms of religion, language, ethnicity, or culture, then there needs to be a widely felt commitment to the rights of minority groups.’’1 Robert Conquest underlines that even though democracy is brought about in non-democratic societies, it cannot work ‘‘without a fair level of political and social stability’’ (Conquest, The National Interest, Winter 2004/2005, pp. 31–33). He therefore argues that there is an imperative for cultivating a ‘‘civic culture’’ in a civil society in which ‘‘various elements can express themselves politically.’’ But he holds the view that a ‘‘perfect social order’’ is unobtainable even in a democratic order. The above theoretical perspectives may offer useful insights in grasping the complexity of the ongoing political turmoil in Myanmar (formerly known as Burma, which was renamed as Myanmar in 1989). After gaining independence from Britain in January 1948, Myanmar encountered many problems due to the ‘‘divide and rule policy’’ of British colonialism. Nevertheless, it was fortunate enough to have been democratically ruled by the UN till 1962. General Ne Win overthrew the democratic regime in a military coup in 1962 and remained in power till 1988. Due to Cold War politics at that time, the military dictatorship in Burma was supported by the United States, the United Kingdom, and Australia. As the post-military coup events unfolded, Burma got itself embroiled in a civil war between the communists and conservative government. In the meanwhile, the Rangoon government was faced with a powerful Karen tribe that revolted against the government, resulting in another civil war. The conflict between the Burmese military and various political parties during the 1980s, however, paved the way for a democratic uprising in the country. The army and air force were later put under the command of the State Law and Order Restoration Council (SLORC), which continued to serve the interests of the military junta. If we recall, the military government ruthlessly suppressed the 1988 ‘‘urban-centric’’ democratic movement under the leadership of Suu Kyi. Despite that, military rulers were forced to hold the national elections in

Dynamics of Political Transition in Myanmar

207

1990 in the wake of the countrywide movement. Ms. Suu Kyi’s National League for Democracy (NLD) party won parliamentary seats with an overwhelming majority. But the ruling military junta did not allow her to form the government. Instead, she was put under house arrest. In May 1996, a series of renewed acts of repression were gravely committed by the military junta against the NLD political leaders and party workers who were sent to jails. According to Amnesty International: ‘‘In August 1996 the government sentenced 31 political activists to long terms of imprisonment in trials which fell far short of international standards. Political prisoners are almost never allowed legal representation, and trials are generally held in camera; that is, no one is allowed to attend political trials.’’ There was a worldwide condemnation of repressive policies of the military ruling elites of Myanmar. The UN continued to put mounting pressure on the regime to start a political dialogue with the NLD in order to reach political reconciliation. Pursuant to this, bipartite talks between the State Peace and Development Council (SPDC military junta) and NLD were held but without any tangible outcome. On the other hand, the SPDC having gauged the intensity of pro-democracy environment in the country embarked on a policy of ‘‘divide and rule’’ through a tricky way. Prime Minister General Khin Nyunt in August 2003 announced a ‘‘roadmap’’ to democracy under which a new constitution was proposed to be drafted by the National Convention (NC). The SPDC announced that it would implement a ‘‘seven point roadmap’’ as announced by Prime Minister Nyunt. Accordingly, the NC was convened in May 2004 in which over one thousand delegates from 28 cease-fire groups participated. But the two major political parties – NLD and the United Nationalities Alliance (UNA of ethnic minorities) – boycotted the convention in anticipation that there was no possibility of a comprehensive and constructive debate over the core issues. Meanwhile, Prime Minister General Nyunt was sacked on October 19, 2004, replaced by General Soe Win. General Nyunt and his former cabinet colleagues including the Home Minister were placed under house arrest. This apart, cease-fire talks between the Karen National Union (KNU) and SPDC resulted in a fiasco. The situation further deteriorated when the army cracked down on ethnic armed opposition groups in Shan and Mon states. Moreover, the UN-brokered peace initiative was undertaken by the Secretary General and his Special Envoy, Razali Ismail, to facilitate ‘‘national reconciliation and democratization’’ in Myanmar in accordance with General Assembly resolution 59/263 of December 23, 2004. The UN called upon the SPDC, NLD, and ethnic nationality groups to find a

208

B. M. JAIN

tripartite solution to the problem. Following which, the convention was reconvened in February 2005 but without the participation of the NLD and other political parties. On the contrary, leaders of the mainstream political parties were arrested and detained while Suu Kyi still remained under the house arrest, thus derailing the political process by military government. However, the UN Secretary General once again appealed to Myanmar authorities to resume ‘‘substantive political dialogue’’ with representatives of all ethnic nationality groups and political leaders for a ‘‘credible national reconciliation.’’ The UN recently has urged the military government to release 1,300 political prisoners including Suu Kui as part of political reforms towards guaranteeing an effective participation of ‘‘political actors’’ including minority ethnic leaders. As reported, Paulo Sergio Pinheiro, Myanmar Special Rapporteur of the UN Commission on Human Rights, said ‘‘The immediate release of the prisoners would send a powerful signal to the people of Myanmar and the international community that the government is committed to a genuine process of reconciliation and to establishing a participatory democracy in Myanmar.’’2 Pinheiro apprised the UN General Assembly of serious human rights violation by the military government against ethnic minorities and urged the world community to take urgent steps against the regime to stop human rights violation. These efforts have not moved Myanmar authorities.

POLITICAL TRANSITION AND HUMAN RIGHTS VIOLATION Political transition to democracy is hampered by human rights abuses by the military junta against ethnic minorities that constitute a third of the country’s population. Human rights violations are unprecedented in terms of human suffering, extra judicial killings, torture, forced labour and displacement, rape and rapine. The situation has further deteriorated due to a bloody conflict between the armed opposition groups from ethnic minority states and central authorities. Armed opposition groups are demanding a greater autonomy, which the military government has been denying. Although the military government signed over a dozen cease-fires with armed groups, there has been no real progress to reach a permanent political solution. As a result, human rights abuses are on the increase, especially in Shan, Kayin (Karen), Kayah (Karenni), and Mon minority states where the

Dynamics of Political Transition in Myanmar

209

military junta’s army is engaged in counter-insurgency operations against armed groups. The situation in rural areas is becoming worse day by day. The military government has been depriving the rural people of their economic rights. Forced labour is being enforced by the military regime in a high-handed manner. According to Amnesty International, the citizens of Myanmar are denied the right to leave and return to the country in contravention of international law. Over 145,000 Myanmar refugees, reported to be living in Thai camps, are mainly from Kayin and Kayah ethnic minorities. The dominant ethnic community in Myanmar is Bamar with other ethnic groups including Karen (10% of the population), Shan, Chin, Chinese, Indians, Anglo-Burmese, and Anglo-Indians. The following is according to the 2005 Amnesty International Report: Despite the announcement of the release of large numbers of prisoners in November (2004) more than 1,300 political prisoners remained in prison, and arrests and imprisonment for peaceful political opposition activities continued. The army continued to commit serious human rights violations against ethnic minority civilians during counter-insurgency operations in the Mon, Shan and Kayin States, and in Tanintharyi Division. Restrictions on freedom of movement in states with predominantly ethnic minority populations continued to impede farming, trade and employment. This particularly impacted on the Rohingyas in Rakhine State. Ethnic minority civilians living in all these areas continued to be subjected to forced labour by the military.

The vast majority of Rohingyas effectively continued to be denied the right to a nationality under the 1982 Burma Citizenship Law. Rohingyas in northern Rakhine state routinely had to receive permission and pay a fee in order to leave their villages, which greatly inhibited their ability to trade and seek employment. Rohingyas were also frequently subjected to forced labor.  In January (2004) young single women from Kyong Kanya village, Khaw Za village tract, southern Ye township, Mon state were forced to serve and entertain army officers. Male villagers were forced to purchase alcohol for the army. This practice by the army was repeated in other areas of southern Ye township where the Hongsawati Party had been active.  A Shan farmer from Murngkhun village, Non Laew village tract, Laikha Township, Shan state, was forced to transport troops with his tractor so frequently that he did not have sufficient time to farm. In January troops accused him of not wanting to transport them, kicked him off his tractor, and broke his arm by stamping on it.

210

B. M. JAIN

A Rohingya man from northern Maungdaw township reported that villagers from nine village tracts had to build a road for the security forces in February (2004).3

CONCLUSION The roadmap for transition to democracy is beguiling. The people in Myanmar are powerless in the face of disproportionate military might of the government that is apathetic to and unconcerned about the appeals and urgings of the international community, NGOs, and its Southeast Asian neighbours. The US sanctions have also proved ineffective. Despite the sanctions imposed on Myanmar, the French Petroleum Company, Total, has been buying oil from Myanmar. Besides, the opposition parties in Myanmar are in disarray to forge a united and well-coordinated strategy to force the regime to pave the way for democracy. By and large, the NGOs and civil society groups have failed to generate a positive response from ethnic nationalities and various political groups, while the military regime is playing a ‘‘see-saw’’ game, scarcely allowing prudence to take precedence over its paranoiac mindset. Although the pathway to democracy in Myanmar seems to be a tortuous one, the military junta can no longer afford to ignore the volcanic popular mood poised to dismantle the authoritarian regime once for all. Nobel Peace Laureate Suu Kyi is also bent upon continuing her non-violent political struggle against the regime. Nevertheless, long-term planning and a multipronged strategy categorically would be needed to foster close cooperation and coordination between pro-democracy forces in Myanmar, on the one hand, and facilitating agents such as the UN and European Union to bring to bear moral and material pressure on the military regime on the other to find a permanent solution. But it must be borne in mind that the unilateral model of ‘‘regime change’’ to foist democracy would prove counterproductive. Democracy imposed from above will prove suicidal, for the fostering of a regime of law and liberty must conform to indigenous social conditions and cultural peculiarities. Therefore, America must learn an appropriate lesson from its misadventurism in Iraq, which can no longer be replicated in Myanmar. A feasible alternative to the current state of affairs in Myanmar is to sensitize the military government through a collective enterprise that the future of country lies in renegotiating with the voices of democracy.

Dynamics of Political Transition in Myanmar

211

NOTES 1. Electronic Journal of Issues of Democracy, March 2004, p. 23. 2. rediff.com India Limited, 18 June 2005. 3. www.amnesty.org/report/2005/mmr-summary

REFERENCES Conquest, R. (Winter 2004/2005). Downloading democracy. National Interest, 78, 31–33. Dahl, R. A. (1989). Democracy and its critics. New Haven: Yale University Press. Hoffman, S. (2004). Thoughts on fear in global society. Social Research, 71(4), 1023–1036. Huntington, S. P. (1991). The third wave: Democratization in the late twentieth century. Norman: University of Oklahoma. Huntington, S. (2000). Culture, power, and democracy. In: M. F. Platter & A. Smolar (Eds), Globalisation, power, and democracy (p. 12). Baltimore: John Hopkins University Press. Kothari, R. (1987). State against democracy: In search of humane governance. New Delhi: Ajanta Books. Pagden, A. (2005). Imperialism, liberalism and the quest for perpetual peace. Daedalus, 134(2), 57. Plattner, M. F., & Smolar, A. (2000). Globalisation, power, and democracy. Baltimore: Johns Hopkins University Press.

This page intentionally left blank

DEALING WITH MAOISTS: NEPAL’S EXPERIENCE WITH PEACE NEGOTIATIONS Bhuwan Chandra Upreti Plural societies are complex societies, and they have the potential to generate conflicts of different dimensions and magnitudes. The settlement of such conflicts, building peace, and stabilizing peace therefore, becomes a vital aspect of the process of nation building in such countries. The democratic governance in these societies has been a majoritarian one, and it has given way to majority–minority conflicts. Questions of social discriminations, disparities, and inequalities have been prominent in most of these countries. Religion, language, and ethnicity have often acted as divisive forces and have given rise to social and political conflicts. Since most of these conflicts have been directed toward the state, it becomes a major actor in conflict resolution and peace building in plural societies. So a study of the nature and dimensions of conflicts and the strategies of peace negotiations can be helpful in understanding the social and political dynamics of these countries. The countries of South Asia have experienced several types of horizontal and vertical conflicts. Many of these conflicts had separatist tendencies and challenged the integrity of the state in a big way. In comparison to this, Nepal has been one country that did not experience any conflict, insurgency, etc. Therefore, the tautologies of conflict resolution, peace negotiations, and peace building have been new to Nepal and as such have been new Conflict and Peace in South Asia Contributions to Conflict Management, Peace Economics and Development, Volume 5, 213–229 Copyright r 2008 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1572-8323/doi:10.1016/S1572-8323(08)05014-5

213

214

BHUWAN CHANDRA UPRETI

challenges to Nepali society and polity. How to deal with them has been a big question. This paper is an attempt to understand the nature and dynamics of the initiatives taken by the Nepalese government toward resolving the conflict generated by the Maoist insurgency. It also seeks to underline the nature and dynamics of peace negotiations and the reasons behind their failure, the options or choices for peace negotiations, and the alternatives for the resolution of the conflict that were available to the Nepali state.

PEACE AND CONFLICT RESOLUTION Conflict resolution and peace building has acquired much significance in the last few years (Siddiqi, 2003). Peace is a state of stability, progress, welfarism, justice, and trust among the communities, groups, and the people tending the government of a country (Barnes, 2002). Peace does not connote merely the absence of a war-like situation, but it also implies maintenance of the law and order (Samaddar, 2004). It can be said that peace is an essential feature of the stable and developed society and good governance. Peace connotes a situation where there is the absence of all kinds of violence (Galtung, 1996). Peace can be viewed as the diffusion or transformation of a violent situation through nonviolent means. Peace has to be viewed in a broader perspective. It can neither be imposed from above nor be a deterrent behavior. Peace has to be a social condition so that people can live a comfortable life (Bajpai, 2004). The negotiations for peace are a process to persuade the disputing parties for the settlement of a conflict. Intermediaries that are supposed to take up an objective view of the whole issue do the negotiations. The negotiators can be internal or external agencies, individuals, and groups of parties. Peace making is a negotiated agreement reached between the conflicting parties to bring an end to a dispute. Thus, negotiation is a conflict resolution method that involves any sort of assistance or attempts, in which arrangements are made for a face-to-face meeting of the disputing parties so as to communicate to each other. Conflict resolution is a process to bring a peaceful end to a violent situation (Moonis, 2003). The peace negotiations are followed by efforts toward peace building that refers to normalization of relations between the conflicting parties. It is not sufficient to negotiate a peaceful settlement. The peace has to be sustained on a long-term basis. So the peace transformation has to be the ultimate goal of a peace process. It is for this reason that conflict

Nepal’s Experience with Peace Negotiations

215

resolution has acquired a central focus in the studies on conflicts (Schellenberg, 1996). Conflict transformation is the state of acceptance of the existence of diverse identities and reconciliation by the conflicting groups and thus building a situation of normal relations between different groups (Miace, 2001). Who should initiate peace negotiations is an important issue. Whether the state alone has to play the role or popular participation is also required needs a wider consideration (Banarjee, 1988).

CONFLICT IN NEPAL Nepal has suffered the worst kind of conflict in its history that has succeeded in sustaining itself for the last decade in the form of the Maoist insurgency (Upreti, 2006). The Maoist movement basically has been targeted against the state and the institutions, parties, groups, and individuals having an alliance with the state in one form or the other. It should be noted here that what has happened in most of the cases of prolonged insurgencies is that ultimately it is the common people, the youth, and the students who have become victims of conflicts. This has happened in Nepal in the last years. Interestingly, a movement launched by the hardcore communists of Nepal in the form of a protest against the government and in support of their 40 point charter of demands (Maharjan, 2000) has grown over the years, in terms of their capabilities, strength, influence, strategies, and violent operations (Thapa, 2002; Dahal, 2004; Shrestha & Uprety, 2004). In fact, one may argue that the Maoist insurgency reached a critical stage and succeeded in paralyzing the Nepalese economy, society, and polity in a big way (Karki & Seddon, 2003). It may be noted here that the Maoist movement of Nepal is one that took advantage of the prevailing socio-economic and political conditions in Nepal and grew into a strong movement, sustained itself, and reached a stage of challenging the state apparatus in a big way. It is true that the Maoists have linkages with a number of international revolutionary organizations. Nevertheless, it is a fact that the Maoist revolutionaries of Nepal cultivated strong constituencies, took possession of arms and finances by force, raised its own army of young and committed revolutionaries, and in ten years time brought nearly one third of the country under its influence (Thapa, 2003; Maharjan, 2000, p. 178). There are areas that are totally under the control of Maoists. Interestingly, at a time when the international communist movement was experiencing a low profile, Maoist movement flared up in Nepal. The tragedy

216

BHUWAN CHANDRA UPRETI

is that till 1990 none thought of such a violent movement in the country. The Nepalese people have not seen such a conflict situation in the near past history. The royal Nepal army has for the first time fought an insurgency. But then the fact remains that Nepal has passed through a most difficult phase during the last decade. One is reminded of the fact here that in the neighborhood a strong ethnic movement has ruined the highly developed economy of Sri Lanka. How long a state like Nepal could have resisted an insurgency is a serious question. The way the Nepalese state has developed over the last half a century, the failure of successive governments, perpetuation of authoritarianism, Nepal’s failed development, false impressions of a monolithic society, its contribution of semi-feudalism, the failure of political parties, social divides, political mishandling, and many other such factors contributed to the rise of the Maoist movement in the country. The demands of Maoists can be understood at two levels: a socioeconomic agenda, which was related to issues of socio-economic reforms, equality, and distributive justice; and a political agenda, related to transformation of the Nepalese political system by converting it into a Republican State. It would have been possible for the Nepali State to deal with Maoists separately on these two types of agenda. A strong economic agenda would have diluted the propensity of Maoists. It would have also minimized the social bases of the Maoists. Movement or no movement, socio-economic transformation should have been the primary agenda of any government after the establishment of democracy in Nepal. Good governance would have required addressing itself to the issues of socio-economic reforms and development. But that did not happen. It indeed gave strength and justification to a movement such as the one that Nepal has been facing over these years. In fact, this issue of offering an economic package to Maoists had come up in 2001, but the government did not agree to it. The question of the Constituent Assembly of a Republican Constitution is not new to Nepal. These demands have been raised again and again since 1950 and have been ignored by the state. These are issues of far-reaching consequences for Nepali politics. The ruling elite of Nepal were not prepared to entertain such issues. One can understand that these are larger issues and it may not be possible for the government to take them up only because a political organization has raised them on the basis of a violent movement. But the point is why should Nepal’s ruling elite and political parties at large shy away from these issues? Was it not possible to initiate a public debate on these issues and create a national consensus over their implementation or rejection? It appears that the narrow political interest and partitioned politics

Nepal’s Experience with Peace Negotiations

217

loomed large in the way of opening these issues. The Maoists took advantage of this sectional politics and raised a movement on that basis. There was a stage when Maoists had acquired a lot of sympathy and support particularly in the countryside. But gradually a reverse situation emerged and the honeymoon period was over. People became fed up with continuous strikes, violence, threats, forced inclusion in Maoist armies, and economic hardships. They feared being killed either by the army or Maoists. People in the countryside realized that even Maoists had not been able to do anything better than the government. On the contrary, they were faced with the fear of being killed or persecuted by Maoists or the police and armed forces. Many people were constrained to leave their villages. So, the Maoists gradually lost the earlier earned popularity. As a result, Maoists were loosing their social grounds. But this does not mean to say that the Maoists had lost all control. In fact, despite resentment among the people in rural areas, they continued to hold control over areas under earlier possession and still there was wide support for them. Nevertheless, they became more violent and ruthless as time went on. It was quite possible that in the future they would go for forced recruitment with the result that people would face more atrocities and would resent such tendencies. On the whole, Nepal was heading toward a social crisis. The state had become weak, democracy had lost its track, and the monarchy had got the opportunity to consolidate its own powers. It was quite possible that the situation would deteriorate further had the movement continued; there were all the possibilities of Nepal turning into an anarchic state. What steps did the government take to negotiate with Maoists for a peaceful solution of the problem? What was the agenda for peace negotiations? To what extent was the government serious about conflict resolution through negotiation? And why and where did the peace initiatives fail? These are vital issues and need a deeper analysis.

CONFLICT RESOLUTION AND PEACE During the initial phase of the Maoist insurgency, the government was not serious much toward a resolution of the problem. It appears that the ruling elite of Nepal were of the opinion that perhaps it was a strategy of the hardcore communists to gain political strength and influence. It tried to contain them through localized actions. The powerful politico-bureaucratic lobby in the government wanted to take strong actions against Maoist insurgents by use of force and by taking strong actions against the

218

BHUWAN CHANDRA UPRETI

insurgents. Thus, it was viewed as a law and order problem. Some attempts were, however, made to persuade the Maoist leaders for negotiations with the government. From time to time, political leaders such as Padma Ratna Tuladhar, Rishikesh Shah, Jaya Anand, Birendra Keshari Pokharel, and Bishwakant Mainali tried to negotiate with the Maoists on behalf of the government or acted as facilitators for possible negotiations between the government and the Maoists. Later on, K. P. Bhattarai and Sher Bahadur Dueba (Nepali Congress) were also given responsibility from time to time to initiate talks with the Maoists. But their efforts did not bear fruit because there was no clear-cut agenda for the talks. The government was also not committed much to peaceful negotiations. For instance, the government did not give any serious thought to a suggestion to offer an economic package to Maoists (Maharjan, 2000). Attempts were also made to take strong actions against the Maoist rebels (Sarkar, 1992; Mathur, 1991; Upreti, 2001).

FIRST PEACE NEGOTIATIONS: 2001 The first serious attempt toward the resolution of the Maoist conflict through bilateral negotiations was made in 2001 by the Nepali Congress government under the leadership of Sher Bahadur Dueba. The first round of peace talks began on August 30, 2001. The terms of reference and other general issues were talked of in the meeting. Thus, stages were set for a continued dialog, and thus they reached a negotiated settlement. On September 14–15, the second round of talks took place. Maoists put forward their core political demands: interim government, Constituent Assembly, and the replacement of the existing political system by a Republican form of government. The government did not take any cognizance of the Maoist demands. As a result the second round of talks ended without any outcome. It was clear, however that the Maoists would not accept anything less than their political demands. It was also clear that the government was not prepared to listen to the Maoist demands. However, as a gesture to the third round of talks to be held on November 13, 2001 the government decided to release 68 Maoist prisoners from various jails and it also agreed to scrap the Public Security Regulations Act. The Maoists agreed to drop the demand for a Republican state but stressed the demand for a Constituent Assembly. It seems that Maoists were playing a political game. They agreed not to put stress upon the Republican state because they knew that if the demand for a Constituent Assembly were accepted, it would not be difficult to frame a republican constitution.

Nepal’s Experience with Peace Negotiations

219

The government, however, did not agree to any of their demands. The Maoists did not see any relevance in continuing the talks. They decided to return to their old positions and start guerrilla attacks afresh. They targeted their strikes on the royal Nepali arms barracks as well for the first time. On November 26, 2001 King Gyanendra declared an emergency in the country. The Maoists were declared terrorists and the royal Nepal army was deployed to combat insurgency in the country. Thus, the peace talks failed without any future possibilities of the resumption of talks. Both parties stuck to their respective positions and no room was left for a negotiated settlement of the issues. The failure of the peace talks followed an armed conflict between Maoists and the royal army.

SECOND PEACE NEGOTIATIONS: 2003 The second round of peace negotiations between the government and the Maoists began toward the beginning of 2003. In fact, soon after taking over power in October 2002, King Gyanendra had given the impression that he himself would initiate peace talks with the Maoists. It was indeed part of his strategy to consolidate his position and legitimize his political action by resolving the conflict. He also wanted to let the people of Nepal realize that the political parties could not negotiate a peaceful settlement of the Maoist problem, while the king could. This would have added to his politicoadministrative capability and justified his action to take power into his hands. As a first step in the direction of peace negotiations, both the government and the Maoists announced a ceasefire on January 30, 2003. The government agreed to stop calling Maoists terrorists and renounced the bounty on the head of some of the Maoist leaders (Raj, 2004). King Gyanendra himself was quite enthusiastic about peace talks, as he had declared that he was willing to find a peaceful settlement of the Maoist problem. He was also looking for an active political role and leadership for himself. There were many delays in forming the peace talks committee of the government. The finalization of the procedural matters also caused delays. The first round of talks was held in April 2003 under the leadership of Prime Minister Lokendra Bahadur Chand from the government. The talks remained confined to procedural issues. The second round of talks held in May 2003 also kept itself limited to procedural issues. It was agreed by the government that the Royal Nepal army shall limit its operations within a 5 km radius from its barracks. It also agreed to release three Maoist

220

BHUWAN CHANDRA UPRETI

leaders from the jail. On May 30, 2003 Prime Minister Chand resigned and Surya Bahadur Thapa was appointed as the new Prime Minister of Nepal on June 5, 2003. The third round of talks took place on August 17–19, 2003. Prakash Chand Lohani and Kamal Thapa were taken as members of the government negotiating team. The Maoists had already become suspicious of the motives and sincerity of the government regarding peace negotiations. They repeatedly were asking to implement the agreement that they had reached in the second round of talks (Uprety, 2004). In the third round, the political agenda was discussed. But the negotiations failed without any headway toward a peaceful settlement of the problem. The talks ended without any achievement and without underlining any possibilities for a resumption of peace talks in the future. In fact, both the parties stuck to their own positions and none exhibited any flexibility with a view to providing any further scope to a continuation of peace talks. After the abrogation of the process of peace negotiations, the Maoists again took a course of violent actions while the armed forces reopened their strikes against the insurgents. No organized efforts were made afterward to negotiate peace in the kingdom. King Gyanendra’s assumption of political powers in February 2005 after declaring an emergency in the country, further complicated the political situation and added to the political deadlock between the government and the Maoists (Upreti, 2005). Although the King’s political assertion opened possibilities for a polarization of political parties and the Maoists, it was clear that there were at least possibilities for fresh initiatives to be taken for peace talks.

WHY PEACE TALKS FAILED? Why the peace talks failed without reaching any conclusion is an important issue here. In round two of the peace talks held in 2001 and 2003, there were two parties involved: the Maoists representing the revolutionary ideology and the government basically protecting the interests of the traditional political forces represented by the monarchy and the pro-establishment rightist groups. It is true that in the 2001 peace talks the Nepali Congress Party was involved and that there was an elected government taking part in the peace talks. But in this opportunity the government did not take any position and became status quo in regard to the constitution and the nature of the Nepali state. The perception, attitude, and agenda of the government had clearly reflected that it would not like to deviate from the existing

Nepal’s Experience with Peace Negotiations

221

political order in Nepal. In fact, the government was not prepared to take a position that would go against the status of the monarchy. Perhaps, they saw their political future protected in taking such a position while Maoists had a different perception. They were looking for a political change in the country that would relegate the status of the monarchy and would at the same time ensure their own entry into mainstream politics. In fact, it seems that there were three strong political groups in Nepal: monarchy, political parties, and Maoists who had been looking for political legitimacy in different ways. They had been contesting for power. Each of these political groups was working at a different political wavelength. They did not trust each other and were willing to let the other group down. Thus, each political group was looking for political legitimacy, political power, and political supremacy. But their perceptions, attitudes, and courses of action were different. As a result, there was political deadlock, conflict became obvious, and the failure of peace negotiations became inevitable. The various reasons that may be held responsible for the failure of peace talks can be stated as the following: 1. It is said that the peace initiatives were largely guided by the objective of power sharing. So the negotiating groups were not very serious in resolving the sources of conflict as much as building political space for themselves. 2. It is painful to state that the negotiating parties did not exhibit any flexibility during the peace talks regarding the agenda of the negotiation. There prevailed a rigid attitude every time, as if they had a vested interest in the perpetuation of a situation of distrust between the two groups. 3. It has been argued that those who were given the responsibility of being facilitators or those who participated in the negotiation did not have much previous experience in peace negotiations. They did not know how to proceed. At times, the negotiating teams were constituted hurriedly, with political considerations in mind. 4. It is also important to note that in peace negotiations the facilitators and negotiators have a very significant role to play. In fact, much of the progress in the peace talks depends to what extent members of one negotiation team are acceptable to other. It seems that the government did not adopt a broader perspective while nominating the facilitators or negotiators. It had its own vested interest in selecting the negotiators for talks. 5. The government did not show sincerity in the implementation of the decisions, which were taken just before or during the course of peace

222

BHUWAN CHANDRA UPRETI

talks. It added to the suspicions of the Maoists regarding the intentions of the government. These decisions had been taken in order to ease the atmosphere during the course of peace talks. But the insincerity of the government toward implementing these decisions not only created doubts but also reflected if the government was interested in a mere formality. 6. The attitude of various political parties seemed to be rather noncooperative. They remained unconcerned as to peace negotiations. While the government should have taken the political parties into its confidence, the parties should have come forward to lend support to the peace negotiations. Unfortunately such a situation did not occur. 7. It seems that both the Maoists and the government were more interested in using the time of negotiations or ceasefire as a strategic pause to strengthen their own capabilities against each other. It can be said that the peace negotiations failed in Nepal because of the ill preparations of the government for peace talks, preconceived notions, misperceptions and distrust between the negotiating parties, and rigidity of the two parties regarding their respective positions. It is unfortunate that no concrete efforts could be made afterward to resume peace talks and resolve the conflict. The point is that neither can a government work nor can a state live in a perpetual state of conflict. The conflict has to be resolved. What alternatives were left to Nepal to resolve the conflict is an important issue.

STRATEGIES AND ALTERNATIVES In this part, our endeavor would be to look into the alternatives that were available to resolve the Maoist conflict that the Nepali state could have taken. How did the Nepali government look at these strategies? And what could have been an appropriate possible way of conflict resolution? The following strategies were important in the context of Nepal.

Conflict Resolution by Use of Force To contain the conflicting groups by use of force has been a traditional strategy applied by most of the countries infested with insurgencies, revolts, and so on. The use of force against the rebels has been termed as counter insurgency operations. It is looked upon as a powerful instrument, through

Nepal’s Experience with Peace Negotiations

223

which a state can protect itself, consolidate its identity, and establish its superiority over the other groups intending to challenge the authority of the state. After the failure of the first round of talks with the Maoists, Nepal also had taken course to a military solution of the problem. The Maoists were declared terrorists and the army was deployed to control the insurgency through extensive use of force. But then the fact remains that the army had failed in containing the Maoists. The only outcome of this phenomenon was that the army acquired influence in the deliberations of the government, particularly in relation to Maoist issues. It is difficult to find an example anywhere in the world where use of force has been helpful in establishing a durable peace. A limited use of force at the initial stage of a conflict might be of some use but not in the case of a prolonged conflict. Nepal though took course to this alternative, but it was clear that it was not a viable alternative for peace in the country.

Conflict Resolution through Democratic Means It is possible to restore peace by effective implementation of constitutional structures, strengthening of democratic institutions, law and order, and constitutional amendments to incorporate some of the demands of the agitating groups. But this alternative could not have been effective in Nepal’s case, as there were fundamental differences between the Maoists and the government in relation to the existing constitution and the form of government. The Maoists neither agreed to present a constitution nor constitutional monarchy, so the question of constitutional means becoming an alternative strategy for the resolution of the conflict did not arise.

International Mediation This alternative is related to conflict resolution through negotiations, in which case facilitators and mediators are international agencies or countries. International mediation is widely used in many cases. In the case of Nepal, the United States, Britain, India, and China were viewed as possible negotiators. Switzerland and Norway had also expressed their interest in mediation. At the external front, India and the United States seem to be important; we will come back to this again in the next few pages. The UNO and the EU were also viewed as possible negotiators. The UNO had already

224

BHUWAN CHANDRA UPRETI

expressed their willingness to agree to the UN mediation. But the government did not express any opinion regarding international mediation. International mediation is a complex issue and it is necessary that both the parties agree to international mediation. In Nepal, this was not the case, mainly because the two parties could have hardly reached to a common understanding on the negotiators. The Maoists later on gave their willingness for UN mediation, but the government was not agreed to it.

Conflict Resolution through Bilateral Negotiations The bilateral negotiations between Maoists and the government on a planned basis with clear terms could be the most viable alternative for conflict resolution and peace in the country. In bilateral peace negotiations, it is necessary that the negotiators are acceptable to the conflicting group; efforts are made for confidence building; and enough room is left for flexibility. In the case of the two peace talks between the Maoists and the government, no such preliminary efforts were made. As a result, the peace talks could not proceed further. Whether it was possible to break the deadlock over conflict resolution by declaring elections for a Constituent Assembly is an important question. This has been one of the major demands of the Maoists and it was likely that they would welcome such a decision taken by the government. But the government was not ready to accept it.

INDIA AND THE PEACE PROCESS IN NEPAL There are certain reasons, due to which conflict and peace in Nepal became important factors for India as well. India being a major power in the South Asian region has its concerns for peace and stability in the region. Even if it does not affect India, its concerns are obvious, because it has direct or indirect implications for her. Apart from this general situation in South Asia, Nepal has specific importance for India in many respects. Nepal has a strategic location in the southern slopes of the Himalayas. Nepal’s security has a direct bearing for India’s northern security system. Therefore, any conflict leading to instability and disorder in Nepal becomes a matter of concern for India in respect to its own security in the Himalayas. Second, an important aspect that has to be taken into consideration is that the India–Nepal border is open and there is an unrestricted flow of the population across the border. There are many implications of the open

Nepal’s Experience with Peace Negotiations

225

border in the context of the Maoist insurgency in Nepal. Ever since the beginning of the Maoist movement, the neighboring Indian region has been used by the insurgents as a safe hideout. Whenever the Maoists would face heavy pressure from the police force and the royal army, they would quietly slip out into the Indian side and stay there till the situation was not normal on the Nepali side. It was noticed at many places that the Maoist training camps were located near the Indo–Nepal border so that they could easily cross the border whenever there was a need. Those Maoists who were injured during fighting with the government forces were taken to Indian hospitals for treatment. Since a large number of Nepalis cross the border every day to come to India, it was difficult to check the Maoist infiltration into the Indian Territory. In recent years, Nepali migration to India had increased due to the Maoist violence, particularly in the rural areas of the far western hills. It was due to insecurity and declining economic activities that the people of the rural areas of Nepal found it safe to move to Indian regions. There are reports that indicate the number of Nepali migrants has increased tremendously in recent years. The open border also facilitates easy interaction between Maoist insurgents of Nepal and the extremist groups in India. There have been reports to indicate that the Indian extremist groups had linkages with Maoists of Nepal. It is also important to note that in the last few years, extremist activities were noticed on the Indian side of the border. They were suspected to be Indian extremist groups who were encouraged by the Nepali insurgents and therefore they were trying to cultivate fresh areas for their activities. It is clear that India’s concerns were obvious in respect to Maoist insurgency in Nepal. India’s consistent desire has been that the Maoist issue could be resolved amicably and that peace, stability, and democracy could be restored in the kingdom. However, India does not appear to be clear and consistent about its role and cooperation in Nepal. Was it that India could not assess the situation in Nepal (Sinha, 2005)? Actually, the issue is complex. The Nepali political parties and democratic leadership, particularly the Nepali Congress, feels that India would support their point of view. With the emerging understanding between political parties and the Maoists, both expect India to support their cause. On the other hand, the Nepali government expects India to support Nepal’s armed action against the Maoists. India has shown concern for democracy in Nepal at bilateral and international forums. India has also converged at different occasions in its displeasure over the king’s actions during the last two years and urged him

226

BHUWAN CHANDRA UPRETI

to create conditions for the reestablishment of democracy in Nepal. But at the same time, India also acceded to the Nepali government’s request to provide arms assistance to Nepal in order to strengthen the royal Nepal army in its drive against Maoists. India seems to have lacked a clear-cut approach. India tried to pressure the king to take appropriate measures toward strengthening democracy, before providing its arms assistance, but every time India could not maintain firmness and consistency in this respect. Actually, India has tried to satisfy all the political forces in Nepal. As a result, it failed in following a clear-cut approach, and at the same time it could not gain any appreciation for its assistance. In fact, it is very difficult to satisfy the contending political forces in Nepal, particularly when India wants to adopt a balancing policy. As far as India’s role in peace negotiations is concerned, India’s past experience have not been encouraging. India’s involvement in Sri Lanka was rather disappointing. Therefore, India would not have liked to play any direct role in peace negotiations. Because of India’s relations with the contending forces in Nepal, it would neither be possible nor desirable for India to involve itself in the peace negotiation process. It is also important to note that the peace negotiations that took place were bilateral in nature and there were no indications for any multilateral peace negotiations. It may also be noted here that whether it was the monarchy, political parties, or the Maoist leaders, all have their linkages and support bases in India. Their lobbies also influenced India’s approach toward conflict and peace negotiations in Nepal. However, India’s concerns are obvious, keeping in view her own security interest and peace and stability in Nepal. India would have succeeded in pressuring the contending groups in Nepal to agree to bilateral negotiations. India could have also acted as a facilitator in preparing for the negotiations without directly involving itself in the negotiations. But that India could not do, perhaps for the reason of the complex nature of India-Nepal relations, the linkages of contending groups in Nepal vis-a`-vis India, and Nepal’s rather cool attitude in this regard. The point also relevant here is that Nepal itself was not desperately looking that much for the success of the peace talks.

UNITED STATES AND PEACE IN NEPAL At the international level, the United State’s role was important in conflict resolution in Nepal. The United States seems to have viewed Maoist conflict in Nepal in the broader context of peace and stability in the South Asian

Nepal’s Experience with Peace Negotiations

227

region and the spreading of revolutionary ideology in the international context. The United States has also looked upon Maoist movement in Nepal in the context of the spreading of the menace of terrorism. The Maoists did not trust the United States and believed that its role was negative since the beginning (Hindu, 2005). The United States had supported the view that Maoists be called terrorists. It had also strongly supported a military solution to the Maoist problem in Nepal. America also provided arms equipment and other facilities to the royal Nepali army. The United States though criticized the King’s action to avert the democratic process and called for restoration of democracy; it had been one of the staunch international supporters of military action against the Maoists. There were least possibilities of Unites States mediation in peace negotiations in Nepal. Actually, there were at least possibilities for any party in Nepal agreeing to United States mediation, particularly the Maoists and the political parties. There has been a difference between United States and the Indian position in Nepal. The United States is not a looser in either way. It did not affect her whether peace negotiations were carried forward or the Nepali government continued with its hard line policy. The United States also did not seem to have any specific interest in Nepal, except her general security interest in South Asia. But in India’s case, it mattered much because of its manifold relations with that country in comparison to any other country. Despite the fact that there were hardly any possibilities for a third party mediation in peace talks, it can be said that India and the United States could have influenced the negotiating groups in positive directions. However, it depended on the Nepali government to consider such possibilities. In the context of these alternatives to conflict resolution, some issues need to be made clear. It has to be understood that in a situation of prolonged conflict the use of force to contain the rebels could only create the war-like situation that had actually happened in Nepal. Another aspect is that the experience shows that it is not possible to reach to a peaceful resolution of a conflict by use of force alone. At the most, the conflict can be suppressed for some time, it cannot be resolved. The external mediation, too, was a complicated issue and this again was a doubtful alternative in terms of an actual resolution of the problem. International mediation could add new dimensions to the existing situation, thereby further complicating it. The best possible efforts for peace and conflict resolution, therefore, could have been bilateral negotiations through internal mediations, resources, and arrangements on a continuous basis. There was an imperative need that

228

BHUWAN CHANDRA UPRETI

political parties, nongovernmental organizations, and the civil society would take initiatives to bring the two parties to negotiations. There was a need on the part of the civil society to discuss the issues, problems, and prospects related to the peace negotiations. Political parties had a major role to play in this regard. The civil society organizations could have taken initiatives to build a public opinion in favor of peace negotiations. The peace talks failed in Nepal and they could not be resumed because of the following: The government was not clear what it had to say and what it had to convey. There was no willingness on its part to persuade the other groups. It lacked a clear perception. There was no desire to make a congenial environment so peace talks could take place in an appropriate environment. There was rigidity on the part of Maoists as well; they were not prepared to accept anything less than their already submitted demands. They could have also adopted a compromising attitude on certain issues so that the negotiations could take a positive direction. The political parties, nongovernmental organizations, and civil society acted in a manner as if they were not concerned with the peace negotiations. It was considered to be a task taken up by the government alone. The political parties did not take initiatives and remained unconcerned.

REFERENCES Bajpai, K. (2004). A peace audit on South Asia. In: R. Samaddar (Ed.), Peace studies: An introduction to the concept, scope and theories (pp. 98–112). New Delhi: Sage. Banarjee, N. V. (1988). Towards perpetual peace (p. 132). Delhi: Motilal Banarsidass Publishers Pvt. Ltd. Barnes, C. (Ed.) (2002). Owing the peace process: Public participation in peace process. London: Conciliation Resources. Dahal, D. R. (2004). Nepal: Conflict dynamics and choice for peace (Kathmandu). Kathmandu: Conflict situation in Nepal, FES. Galtung, J. (1996). Peace by peaceful means: Peace and conflict, development and civilization (p. 8). Oslo: International Peace Research Institute. Karki, A., & Seddon, D. (Eds). (2003). The people’s war in Nepal (pp. 3–70). Delhi: Adroit Publishers. Maharjan, P. N. (2000). The maoist insurgency and crisis of governability in Nepal. In: K. Dhrub (Ed.), Domestic conflict and crisis of governability in Nepal (pp. 191–193). Kathmandu: Centre for Nepal and Asian Studies. Mathur, R. C. (1991). Challenges before Koirala. The Hindustan Times, June 18.

Nepal’s Experience with Peace Negotiations

229

Miace, H. (2001). Conflict transformation: A multi-dimensional task. In: Berghof Handbook. Germany. Moonis, A. (2003). Why rethink the paradigms of conflict resolution. In: A. Moonis (Ed.), Paradigms of conflict resolution in South Asia (pp. 15–23). Dhaka: The University Press Ltd. Raj, P. A. (2004). Maoist in the land of Buddha. Delhi: Nirala Publications. Samaddar, R. (2004). Problems of preparing a peace studies reader. In: R. Samaddar (Ed.), Peace studies: An introduction to the concept, scope and theories (p. 32). New Delhi: Sage. Sarkar, C. (1992). Nepal, time for change. Indian Express, November 20. Schellenberg, J. A. (1996). Conflict resolution: Theory, research and practice (pp. 8–9). Albany: State University of New York Press. Shrestha, A. P., & Uprety, H. (Eds). (2004). Critical barriers in the negotiations of armed conflict in Nepal. Kathmandu: NEFA, FES. Siddiqi, F. H. (2003). Conflict resolution and peace: Conceptual, and theoretical concerns. In: A. Moonis (Ed.), Paradigms of conflict resolution in South Asia (p. 32). Dhaka: The University Press Ltd. Sinha, J. K. (2005). Misreading the mood, India fails to understand Maoist insurgency in Nepal. Times of India, November 12. Thapa, D. (Ed.) (2002). Understanding the Maoist movement in Nepal. Kathmandu: MartinChautari. Thapa, D. (2003). A kingdom under siege, Nepal’s Maoist insurgency (pp. 85–109). Kathmandu: The Prmithouse. The Hindu (2005, 10 Feb). Upreti, B. C. (2001, July–December). Nepal: Search for good governance. Asian Studies, xix (2), 26–32. Upreti, B. C. (2005, April). Will monarchy survive in Nepal? Seminar, (546), 17–20. Upreti, B. C. (2006). Maoist insurgency in Nepal, nature causes and impact. South Asian Survey, 13(1), 55–65. Uprety, H. (2004). Critical barriers in the negotiations of armed conflict in Nepal. Kathmandu: NEFA, FES.

This page intentionally left blank

INDIA AND BANGLADESH: A RELATIONSHIP ADRIFT Harsh V. Pant Begum Khaleda Zia first visited India only in March 2006 at the end of her term as the Prime Minister of Bangladesh despite the fact that she had already visited Saudi Arabia several times, China twice and other states such as Pakistan, Thailand, Malaysia, and Burma. A visit to India, Bangladesh’s most important neighbor, was probably viewed as unnecessary or problematic, resulting in it being relegated to the very end of the prime minister’s tenure. It was the first visit by a Bangladesh head of government to New Delhi in nine years. Likewise, when the Indian Prime Minister Manmohan Singh visited Bangladesh in 2005 to attend the South Asian Association of Regional Cooperation (SAARC) summit, it was the first visit of an Indian Prime Minister to Dhaka in nearly six years. This is a reflection of the turbulent times through which India’s relationship with Bangladesh seems to be passing in recent times despite an apparent thaw after the military-backed caretaker government took charge of Bangladesh in 2007. It is ironical that this relationship could deteriorate to this extent given India’s central role in the establishment of the independent state of Bangladesh and the close cultural affinities and ethnic linkages that the two states share. But in international politics, friends are as temporary as enemies. It is a state’s national interests that determine the contours of its foreign policy and, in the case of India and Bangladesh, these interests have been diverging for some years now, bringing the two countries to what probably can be described as the lowest ebb in their bilateral relations. Conflict and Peace in South Asia Contributions to Conflict Management, Peace Economics and Development, Volume 5, 231–247 Copyright r 2008 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1572-8323/doi:10.1016/S1572-8323(08)05015-7

231

232

HARSH V. PANT

This chapter examines the factors that are shaping the relations between India and Bangladesh and argues that a host of structural and domestic political variables are pulling the two states in opposite directions. It would require some deft diplomacy to restore the relations back on track but unless some serious effort is made by both sides there is little hope of significant improvements in the long term.

BRIEF HISTORICAL OVERVIEW India and Bangladesh are historically, geographically, and culturally tied to each other to an extent that try as they might they cannot escape this reality and so have to inevitably deal with each other. India’s role in the establishment of an independent Bangladesh in 1971 meant that for few years India enjoyed a privileged relationship with the new state. India’s assistance to the refugees from East Pakistan as well as its relief and reconstruction aid went a long way in establishing the foundations of a new state. India, not surprisingly, was also the first state to grant recognition to Bangladesh; by pulling its troops out of Bangladesh soon after the end of the war it also acknowledged the new state’s sovereignty.1 In 1972, the two states even signed a ‘‘Treaty of Friendship and Peace’’ for a term of twenty-five years, declaring that each side would respect the independence, sovereignty and territorial integrity of the other, and also refrain from interfering in each other’s internal affairs. But the assassination of Mujibur Rehman and the assumption of power by General Zia-ur-Rehman disrupted the healthy evolution in India–Bangladesh ties. It did not take long for the relations to deteriorate thereafter as Bangladesh started moving away from the linguistic nationalism that had been the focal point of its national liberation movement against Pakistan. Islam became the new symbol and binding force of the emerging Bangladeshi nationalism. From the four-pronged state policy of nationalism, democracy, secularism, and socialism, Bangladesh rapidly moved to embrace the Islamic ideology, which has since then been used by all governments to legitimate their rule.2 In fact, India’s attempt to try to project its common ethnic and cultural affinities with Bangladesh backfired as it threatened to dilute the status of hard-earned Bangladeshi national identity. Like other states in the South Asian region, Bangladesh also started resenting India’s overwhelming regional presence and soon India became one of the central issues around which the domestic politics in Bangladesh started revolving. Opposing India emerged as the most effective way of burnishing one’s nationalistic credentials and antiAwami League political parties have been making full use of this tactic.

India and Bangladesh: A Relationship Adrift

233

Despite this, however, the two states acknowledged that they need to work together to address mutual problems. This resulted in the 1977 agreement on the sharing of waters of the river Ganges during the dry season. But largely the disputes between India and Bangladesh were manipulated for political advantage by both Indian and Bangladeshi governments and it has been rightly observed that ever since then their bilateral ties have been characterized by belligerence and insensitivity on India’s part, and oversensitivity and suspicion on the part of Bangladesh (Jacques, 2000). Despite concerns in certain sections in India that the land was being used by anti-India elements and had become a haven for illegal immigrants to cross over to India, India formally granted perpetual lease to Bangladesh in 1992 over 1.5 hectare Teen Bigha corridor that had long separated an enclave of Bangladeshi nationals from their homeland. The coming to power of the Bharatiya Janata Party (BJP) in 1998 was viewed with suspicion in Bangladesh because of concerns that certain sections of Hindu nationalists desired a re-establishment of a ‘‘subcontinental India’’ that existed during the British rule, including territories from Khyber Pass to Chittagong. Hence, the return of the Congress Partyled United Progressive Alliance (UPA) to power in 2004 was cautiously welcomed by Bangladesh with its foreign minister coming to India on a four-day visit as a special envoy of the Prime Minister Khaleda Zia. However, the bilateral relations nosedived in 2005 after New Delhi’s refusal to attend the SAARC summit in Dhaka in February 2005 citing law and order problems in Bangladesh and Nepal. Given Bangladesh’s special attachment to the SAARC as it is credited with initiating the process in the 1980s, it found India’s attitude particularly insulting. In recent years, India’s relations with Bangladesh have been severely constrained by a host of issues and both states feel that the issues they think are important are not being dealt with the seriousness that they deserve. The factors that inhibit the India–Bangladesh relations can be categorized into structural, institutional, and bilateral.

STRUCTURAL: BALANCING INDIA’S PREDOMINANCE Bangladesh is a landlocked state surrounded on three sides by India along 4,094 km of land border, resulting in a near total geographical domination by India, apart from the 193 km of land border that Bangladesh shares with

234

HARSH V. PANT

Myanmar. India’s overarching presence in South Asia has been a cause of concern for all its smaller neighbors and Bangladesh is no exception. For India, the struggle against Pakistan in 1971 was a strategic imperative and with the emergence of Bangladesh, India further marginalized Pakistan by cutting it into half. India might have expected that the state of Bangladesh would remain indebted to India for its role in its independence and would be a close ally. However, structural constraints are the most important determinant of state behavior in international politics and Bangladesh soon started balancing against the preponderance of Indian might in the Indian subcontinent. Like other states in South Asia, Bangladesh also tried to counter Indian hegemony through various means. Given Bangladesh’s strained relations with Pakistan in the early years, the relations between the two states evolved soon after the formation of the new state. A major impetus in this evolution was the desire of both to balance India’s power and influence in the region. In 1974, Pakistan and Bangladesh signed an accord to recognize each other and established formal diplomatic relations two years later. The two states have maintained high-level contacts ever since. It has been rightly observed that popular fears of Indian domination existing in both states were easily played upon, outweighing whatever animosity and resentment lingered between their inhabitants, resulting in close ties between Bangladesh and Pakistan (Jacques, 2000, p. 161). Bangladesh started cultivating Pakistan in an effort to counterbalance its perception of India as the primary threat while Indian foreign policy obsession with Pakistan has led it to ignore Bangladesh. According to some reports, General Pervez Musharraf used his visit to Bangladesh in 2003 to forge covert military ties with Bangladesh and authorize the InterServices Intelligence (ISI) to operate from Bangladeshi territories. More significant is Bangladesh’s attempts to woo an extra-regional power such as China in order to prevent India from asserting its regional supremacy in its relations vis-a`-vis Bangladesh. This strategy is not typical of Bangladesh’s foreign policy but other states in the region (including Pakistan and Nepal) have also used China to counterbalance India.3 And China has only been too willing to play ball as it not only enhances China’s influence in South Asia but also keeps India bogged down in South Asian affairs, thereby preventing its emergence from the straightjacket of a mere ‘‘South Asia power’’ to a major global player, something that India has long desired. Since the establishment of diplomatic ties between China and Bangladesh in 1976, their bilateral ties have been growing steadily over the years, culminating in the signing of a ‘‘Defence Cooperation Agreement’’ between

India and Bangladesh: A Relationship Adrift

235

the two states in 2002 that covers military training and defence production. China has also provided Bangladesh with substantial resources for capability building of Bangladeshi civil servants and law enforcement. The two states have signed an agreement on peaceful uses of nuclear energy in the fields of medicine, agriculture, and biotechnology (Niazi, 2005). The natural gas reserves of Bangladesh are also viewed as a big asset by an energy-hungry China. Much to India’s discomfiture, Bangladesh also supports China’s entry into the SAARC. It is interesting to note in this context the proposal to revive the Stilwell Road or the Old Burma Road, which stretches from the Indian state of Assam through Bangladesh and Myanmar, extending all the way to Yunnan province in China. In 1999, China, India, Myanmar, and Bangladesh came together in what is known as the Kunming Initiative to push this proposal forward mainly because of the trade advantages that it would give to these countries in linking them to Southeast Asia (Maitra, 2003). However, India has since been having second thoughts on this proposal as not only it might give a fillip to insurgents in northeastern India who receive support from Bangladesh but there is also a danger of Chinese goods flooding Indian markets.

INSTITUTIONAL: DOMESTIC POLITICS AND THE ‘‘OTHER’’ A nation’s foreign policy is also a function of domestic political institutions, and in the case of Bangladesh, India has emerged as a major factor in its domestic politics. It would not be an exaggeration to say that in many ways, India is the central issue around which the political parties of Bangladesh define their agenda. Of course, given India’s geographic, linguistic, and cultural linkages to Bangladesh, it should not be a surprise. However, over the years, political parties opposing the Awami League have tended to define themselves in opposition to India, in effect portraying Awami League as India’s stooge. Moreover, the radical Islamic groups have tried to buttress their own ‘‘Islamic identity’’ by attacking India. There is a realization in India that it is viewed as close to one political party and has made some effects to rectify the perception. When the Bangladesh Nationalist Party (BNP)-led coalition assumed office in 2001, the Indian government sent a special emissary to Dhaka to assure the new government that New Delhi had no political favorites in Bangladesh and its

236

HARSH V. PANT

internal affairs are not India’s concerns. However, this failed to make any long-term impact on the new political dispensation in Bangladesh. Some in India argue that it should keep its involvement with Bangladesh separate from the latter’s domestic politics and pursue greater engagement (see, e.g., Mohan, 2006). However, the hard reality is that the political parties in Bangladesh invariably drag India into the nation’s domestic politics to show each other in worse light. By visiting India just before elections and showing that she too can do business with India, Khaleda Zia tried to marginalize her rival Sheikh Hasina (Iyer, 2006). Politics in Bangladesh has become overtly personalized, revolving around the personalities of its two main political leaders, Begum Khaleda Zia and Sheikh Hasina Wajed. The two are so busy running down each other that they have little time to debate serious issues of governance. The political struggle between Zia’s right of center BNP and Wajed’s left-leaning Awami League has turned into a zero-sum game where the biggest loser is Bangladesh itself. Shunning the give and take of democratic political processes, the two parties seem to keep their country perpetually on the verge of chaos, alternating between state repression or crippling national strikes aimed at toppling the government, depending on who is wielding the power. The army in Bangladesh has also made periodic forays into the political landscape, further preventing democratic institutions from strengthening. General Zia-ur-Rehman seized power in the turbulent aftermath of the massacre of the ruling Awami League leaders, including Sheikh Mujibur-Rehman.4 To give his military regime some legitimacy, he wooed the domestic Islamic fundamentalists and the Islamic regimes in the Middle East. From a secular, socialist state he transformed Bangladesh into an Islamic Socialist Republic. This continued under his successor General H.M. Ershad who ruled Bangladesh from 1982 to 1990, thereby ensuring that the armed forces attain an entrenched position in the political structure of Bangladesh. The army remains a powerful force with its own deep-seated interests and thanks to its Pakistan legacy, the Bangladesh army also has in its fold elements that continue to have a strong anti-India outlook.5 The inability of state institutions in Bangladesh to effectively govern has not only raised serious concerns about the future viability of democratic institutions in Bangladesh, but also played a role in undermining India–Bangladesh relations. Bangladesh has been designated as the most corrupt country in the world by Transparency International and features on the Human Rights Watch list as a state where serious problems exist in the

India and Bangladesh: A Relationship Adrift

237

sphere of human rights, particularly of women and religious minorities (Rajamohan, 2006). In the immediate aftermath of 2001 elections in Bangladesh, there were concerted attacks on Hindus by the ruling party activists since Hindus were considered as the supporters of the opposition party the Awami League (Sengupta, 2006). The weakness of the governmental institutions has emboldened non-state actors such as the radical Islamic groups that are attempting to make Bangladesh another frontier in their global jihad against the ‘‘infidels’’ (Hossain, 2006). One such organization Jamaat-ul-Mujahideen Bangladesh (JMB) is not only openly demanding the establishment of Sharia law but is also targeting mainstream politicians and the professional classes who oppose their radical agenda. The State Department of the United States has even issued a travel advisory to its citizens traveling to Bangladesh. However, the ruling BNP government continues to deny that there is a problem. This is partly because it runs a coalition government that includes Jamaat-e-Islami (JeI) and Islami Oikya Jote, which are ideologically linked to various radical Islamist organizations operating in and around Bangladesh.6 In fact, the leaders of JeI have not been shy of proclaiming that now that they are part of the mainstream politics, they should work for their long-term goal of converting Bangladesh into an Islamic state. The increasing polarization between the two mainstream political parties has opened up the political space for the extremist Islamic parties that are now using their new-found relevance as a leverage in putting their radical agenda at the forefront of Bangladesh’s politics (Ganguly, 2006). Religion has succeeded in dominating the political institutions to all extent that the Economist newsmagazine, in one of its issues, raised the issue if the 2001 parliamentary elections were in fact, ‘‘a vote for Bin Laden,’’ given the overwhelming presence of Bin Laden posters during the election campaign (The Economist, 2001). For a state that until a few years ago was considered a moderate Islamic state with a functioning democracy, the collapse of its political institutions has been pretty rapid. According to some estimates, around 50,000 militants belonging to more than 40 groups are now controlling large areas of Bangladesh, with the assistance of JeI and an election of the BNP (Lakshman, 2005). Some have gone to the extent of concluding that it is state institutions and structures of governance that have emerged as the main threats to human security in Bangladesh (see, e.g., Mohsin, 2001, p. 22). The emergence of Bangladesh as a ‘‘weak state with fragile institutions,’’ unable to tackle internal security and governance has given rise to problems in India–Bangladesh relations on a whole range of issues (Iftekharuzzaman, 1998).

238

HARSH V. PANT

Domestic politics in India has also played its part in shaping India– Bangladesh relations. While in opposition, the Congress Party leaders had often accused the NDA government’s foreign policy toward Bangladesh as driven by sectarian purposes. In this view, the BJP’s anti-Muslim posture in domestic politics was shaping its antagonistic posture toward Bangladesh. The BJP, in opposition, has paid back in the same coin by arguing that the Congress-led UPA’s foreign policy toward Bangladesh and illegal immigrants is driven by the appeasement of minorities rather than India’s own national interests (Hindustan Times, 2006). The consequence has been that instead of addressing the issue of illegal immigration in a judicious manner, the political parties have ended up making a political football of the issue, even as the problems that it is engendering continue to fester (Choudhury, 2006).

BILATERAL ISSUES Water Concerns As Bangladesh is heavily dependent on India for the flow of water of the 54 rivers that it shares with India, it has complained that the distribution of river water remains unfair. The construction of the Farakka Barrage by India to increase water supply in the Hoogli river was a major bone of contention between the two states. India has built a feeder canal at Farakka where the Ganges divides itself into two branches and this has allowed India to control the flow by re-channeling water on the Indian side of the river (Hassan, 1991). This was finally resolved by the signing of a 30-year water-sharing agreement for the Ganges in 1996 with the lapsing of an earlier agreement. However, the differences have re-emerged with India’s plan of integrating 30 major international rivers in order to divest the flow of water toward the drought-prone regions. This has generated concerns in Bangladesh about some serious economic and environmental problems whereas India continues to insist that its river-linking project will in no way adversely affect the interests of Bangladesh. India’s river-linking project, however, is currently aimed at only peninsular rivers and it claims that Bangladesh would be consulted at the time of interconnecting northern rivers. Being the upper riparian state, India clearly dominates the management of water resources. Dhaka’s bigger grouse is that while there is a water-sharing accord with regard to the Ganges, similar accords are also needed for the remaining 53 rivers. It claims that a large number of its rivers and canals have dried up because of India’s denial of water to Bangladesh (Parthasarthy, 2006).

India and Bangladesh: A Relationship Adrift

239

Migration and Its Discontents Another bilateral issue is the flow of illegal Bangladeshi immigrants to India. India shares a long border with Bangladesh, longer than the one it shares with China and it runs through the Indian states of West Bengal, Assam, Meghalaya, Tripura, and Mizoram. India has alleged that this continued illegal immigration has altered the demography of India’s border areas resulting in ethnic imbalance, electoral irregularity, and loss of employment opportunities for Indian nationals (Sengupta, 2005a). The massive influx of refugees fleeing persecution in East Pakistan (now Bangladesh) was one of the major reasons for India’s decision to assist Mukti Bahini fighting for liberation from Pakistan (Ganguly, 2006, pp. 98–102; Ayoob & Subrahmanyam, 1972). According to some estimates, 1,50,00,000 illegal immigrants are present in India and 3,00,00 enter every year. Out of this, around 15–18 million illegal immigrants are estimated to be from Bangladesh, spread throughout Northeast but mostly in Assam.7 The northeastern states in India are particularly vulnerable as less than 1 percent of the external boundaries of the region are contiguous with the rest of India while around 99 percent are international boundaries. Bangladesh has complained that the overwhelming numerical superiority of Indian security forces along the long border has resulted in the killing of innocent Bangladeshi nationals by India’s Border Security Force (BSF). According to some estimates, the ratio of Indian and Bangladeshi security forces deployed along the border is 2.5:1, which in India’s favor. Even when Khaleda Zia visited India in March 2006, India’s BSF was exchanging fire with its Bangladeshi counterparts, the Bangladeshi Rifles, along the border. Such exchanges are now a regular feature along the India–Bangladesh border, often resulting in inhumane treatment of each other’s forces. Bangladesh also argues that the land boundary delimitation agreement signed in 1974 between Indira Gandhi and Mujibur-Rehman is yet to be implemented with 6.5 km of unmarked land border in need of demarcation. Ineffective border management has emerged as a major irritant in India– Bangladesh ties due to concerns regarding smuggling, illegal immigration, trafficking of women and children, and insurgency. India has moved toward the erection of a barbed security fence along the Indo-Bangladesh border areas over strenuous objections of Bangladesh government though the process remains slow. India has so far fenced off more than a third of its border with Bangladesh but this has led to strong resentment among the border villages that trade with each other and among smugglers on both sides as they stand to lose their control over the border areas.

240

HARSH V. PANT

Organized criminal gangs and syndicates with powerful political and communal influence and patronage have cropped up at different places on the border. India’s plan is to erect a 2,886-km fence along its border with Bangladesh though there is little evidence that this fencing will be effective in checking infiltration along the Indo-Bangladeshi border, where there are 57 Bangladeshi enclaves in India and 111 Indian enclaves inside Bangladesh. For some in India, India’s border with Bangladesh is more difficult to manage than its border with Pakistan as the Indian army has no presence at the Indo-Bangladesh border (Sengupta, 2005b). India’s concerns are not only about the demographic changes but also about the security threat due to the presence of anti-India radicals who sneak into the Indian territory along with the economically deprived Bangladeshi migrants. There are also concerns in Bangladesh that India has the resources and inclination to reignite the rebellion in Chittagong Hill Tracts. India has been accused of helping the rebels with resources and training from 1975 to 1997 when the government of Bangladesh finally signed the peace treaty with the Chakma tribal insurgents, allowing for the return of tribal refugees from India. They had fled to India in the 1980s to escape the violence caused by an insurgency in their homeland in the Chittagong Hill Tracts.8 But suspicions about Indian motives remain strong in Bangladesh and many see it as a major leverage that India enjoys in its relationship with its neighbor (Abdi, 2005).

Islamic Fundamentalism The rise of Islamic fundamentalism in Bangladesh has further aggravated India’s relations with its neighbor. Bangladesh has the third largest Muslim population in the world with the rate of unemployment hovering at around 75 percent. Of its 144-million populace, 70 million live on less than $10 a day (Perry, 2006). This has made it an easy target for Islamic radical groups with global pretensions, believing in the unity of Ummah against the West and other non-believers. Militant groups have percolated to all sections of Bangladeshi society including mosques, seminaries, educational institutions, the judiciary, mass media, and the armed forces, and Islamists are being trained in over 50 camps across the country (Lakshman, 2005). The main opposition party in Bangladesh, the Awami League, has been drawing attention of the international community toward the ‘‘Talibanization’’ of the Bangladeshi society for some time now.9 Not only is anti-India rhetoric

India and Bangladesh: A Relationship Adrift

241

at an all time high in Bangladesh but Pakistan’s ISI has been making full use of growing radical Islam for furthering its own anti-India agenda. BNP’s leader Khaleda Zia, while in opposition, had been quoted as saying that the insurgents in India’s northeast are ‘‘freedom fighters’’ and that Bangladesh should help them, instead of curbing their activities. There is political consensus in India that Bangladesh cannot continue in denial mode on terrorist and insurgent activities toward India from its territories and that Bangladesh should be forced to take concerted verifiable action against anti-India actors. Bangladesh has long been a willing host to militant outfits operating in northeast India (Tarapot, 1993). Even before the emergence of Bangladesh as an independent state, the Chittagong Hill Tracts were used by the Pakistani army to train and shelter Mizo and Naga insurgents. It has been reported that the ISI of Pakistan and Bangladesh have been coordinating their anti-India activities along with outfits such as the United Liberation Front (ULF) of Assam, the NSCN, the National Liberation Front of Tripura and the All Tripura Tiger Force (ATTP). There have been concerns in recent years that as Pakistan has come under increasing scrutiny for its role in sponsoring terrorism, the Pakistan-based terrorist groups have moved their training camps to Bangladesh. India has even handed over to Bangladesh a list of more than 170 insurgent camps inside Bangladesh and has provided ‘‘evidence’’ in the form of maps and exact locations of these camps but no concrete action has been taken on the list. Indian intelligence agencies are claiming that the ISI and various militant organizations based in Pakistan have changed their modus operandi and are now using Bangladesh as a transit point for pushing terrorists into India. Bangladeshi nationals, who are part of terrorist groups, are being asked to illegally enter India and set up base in different parts of the country. They then provide safe hideouts to terrorists, act as couriers of explosives and transact in hawala activities for them (Bhatt, 2006). The rise of JMB in Bangladesh is a testament to the growing radicalization of Bangladesh.10 The JMB is an outgrowth of the Salafi brand of Islam. Ever since the withdrawal of the former Soviet Union from Afghanistan, there has been a gradual growth of the Salafists around the globe and Bangladesh has been no exception. The Salafist ideology has been nurtured in the ultra-conservative environs of Saudi Arabia and has been exported to the rest of the world ever since the boom in Saudi oil revenues in the 1970s. Charities in Saudi Arabia and Pakistan are among the major donors to Bangladeshi non-governmental organizations and a large portion of that money is used to fund madrassas, which spawn willing recruits to the jihadi cause. As a consequence, Bangladeshi Islam which has traditionally

242

HARSH V. PANT

been tolerant and syncretic in nature has come to be dominated by the radical strain in recent years (Rahim, 2001). Though the JMB was finally banned by the government of Bangladesh in early 2005, following threats of withdrawal of aid by the West, it still managed to shock the country by carrying out serial bomb blasts in August 2005 in 63 out of 64 districts of Bangladesh. Suicide bombings have also emerged as another tool in the arsenal of radical Islamists in recent months, suggesting that militants in Bangladesh are adopting the tactics and techniques of their counterparts in the Middle East. A number of recent terrorist attacks in India have been traced back to Bangladeshi nationals working on behalf of Harkat-ul-Jihadi-al-Islami Bangladesh (HuJI-BD), which is suspected of being an Al-Qaeda front and also has links with Jaish-e-Mohmmed and Lashkar-e-Toiba, jihadi groups based in Pakistan (see, e.g., Singh, 2006). It is one of the fastest growing fundamentalist organizations in the country and has been designated a terrorist organization by the United States. Islamic radicals from across Asia, including India, Myanmar, Thailand, Indonesia, Afghanistan and the Philippines, are gravitating toward Bangladesh for militant training, seeking refuge there from their home governments under the protection of HUJIBD (Jane’s Foreign Report, 2005). Despite the fact that the international community, including India, has long been asking Dhaka to take action against the presence of Taliban remnants along with various other militant groups in its territory, it was only in February 2005 that the government decided to address this issue by banning two groups and taking action against some others. But even now the attempts at tackling this menace remain half-hearted.

Weak Economic Ties The economic basis of bilateral ties between India and Bangladesh remains weak and lack of any constructive agenda in this sphere makes it even more difficult for the two states to move forward on other issues. Despite this fact the two states are members of not just SAARC but also BIMSTEC (Bay of Bengal Initiative for Multi Sectoral Technical and Economic Cooperation). The Indo-Bangladesh Joint Working Group on Trade Issues was established in 2003 and has been meeting regularly but has failed in reorienting economic ties between the two states. While the bilateral trade hovers around $1.6 billion, the illegal trade is the real winner. India’s efforts to obtain supply of gas from Bangladesh and secure transit and trans-shipment

India and Bangladesh: A Relationship Adrift

243

facilities for accessing Northeast states through its territories have been rebuffed by Bangladesh. The present government has also reneged on its earlier commitment to the tripartite agreement for transportation of gas through pipeline from Myanmar to India running through Bangladesh. India wants to pursue this project seriously as of all the pipeline options to bring natural gas from the Shwe fields in offshore Myanmar, the overland option via Bangladesh is possibly the most economical (Ramachandran, 2005). The India–Bangladesh–Myanmar pipeline idea was initially seen as a landmark in IndoBangladesh relations, with Bangladesh agreeing to its territory being used for transport of any commodity to the Indian market for the first time in 30years. While India seems willing to pay $125 million as transmit fee to Bangladesh, Dhaka also wants transit facility through India for hydroelectric power from Nepal and Bhutan to Bangladesh, a corridor of trade between Nepal and Bhutan, and measures to reduce $2 billion trade imbalance before it can conclude this agreement. Indian corporate giant, the Tata Group, has proposed massive investments in Bangladesh to the tune of 2.5 billion dollars in steel, fertilizer, and power sectors but the agreement is stuck on differences over the price of natural gas supply demanded by Bangladesh to be used in these projects (Chaterjee, 2006). India has proposed to conclude a free trade agreement (FTA) with Bangladesh and there are many in Bangladesh who are asking the government to consider this seriously, as Sri Lanka has recently overtaken Bangladesh as India’s largest trading partner in the region mainly due to a recently signed FTA.11 This will not only strengthen the economic basis of bilateral ties but will also go a long way in solving the problem of smuggling of around 2 billion dollars worth of Indian goods into Bangladesh annually. However, India remains skeptical of Bangladesh’s testing procedures and institutions and has asked for harmonization of codes and standardization of classifications, which Bangladesh views as another sign of India’s protectionist tendencies (Sengupta, 2005c; also, see Routray, 2005). Dhaka has been asking for unilateral tariff concessions on select items of export interest to Bangladesh to help it reduce its trade deficit with India while India feels that Indian investments in Bangladesh, such as the one proposed by the Tatas, is another way of solving this problem. With India’s economic growth at an all time high, Indian investments in the neighboring region will increase in the coming years and there is no reason for Bangladesh to exclude itself from a process that will benefit it immensely, especially as it is set to become the second largest economy in South Asia after India. Economic development in Bangladesh is also in India’s interest

244

HARSH V. PANT

as generation of employment avenues will not only curb illegal immigration from Bangladesh but also make it difficult for the terrorist groups to find fresh recruits. Some have argued that the SAARC agenda, including regional free trade, upgrading of transport and communication infrastructure, and energy cooperation, cannot be realized unless India–Bangladesh relations are put back on track. An improvement in India–Bangladesh ties is also essential for the integration of the eastern part of the Indian subcontinent, including Nepal and Bhutan. India also realizes that the success of its ‘‘Look East’’ policy depends on Bangladesh acting as a bridge between North East India and Southeast Asia. The need to develop closer transport and communication links between India and Bangladesh has long been apparent to realize the full potential of regional economic cooperation but so far there has only been lackluster progress in this area (Thapliyal, 1999). While a regular bus service between Kolkata and Dhaka started in 2003, it continues to face problems in efficient management, mainly due to Dhaka’s insistence on levying high travel tax. The proposal to commence bus services from other Indian cities such as Shillong, Guwahati, and Siliguri to Dhaka has not moved much further. Regular passenger train services are yet to start between India and Bangladesh despite the signing of an agreement in 2001. However, in a move that could have long-term benefits for the Northeast, India and Bangladesh have agreed to allow each other’s territory to be used for transporting goods. The two states have agreed to make arrangements for the use of their waterways, roadways, and railways for commerce between the two countries for the passage of goods between places in one state through the territory of the other (Indian Express, 2006).

CONCLUSION The state of India-Bangladesh relations has been so pitiful in recent years that merely signing an anodyne joint statement during Khaleda Zia’s visit to India in March 2006 talking of a ‘‘constructive’’ and ‘‘forward-looking’’ exchange of views was hailed by both sides as a big achievement. The present constraints that impinge upon this relationship do not offer a hopeful prognosis. India may find it easier and more productive to deal with the military government, especially as it has acted swiftly against some of the most radical Islamists and expressed its desire to work towards improving Bangladesh’s ties with India. But it should be under no illusion that this will

India and Bangladesh: A Relationship Adrift

245

solve the problem of radicalization in Bangladesh or curtail growing Islamist terror networks there. In the end, a democratic government representative of the will of the people is probably the best means of achieving any lasting solution that India may desire. It is imperative for both sides to reduce their mutual ‘‘trust deficit’’ that has crept into their bilateral ties, which is a necessary first step before any meaningful relationship can take off. India, being the bigger and economically more powerful of the two, can and should take the lead in this process by taking generous and constructive steps. India’s desire to emerge as a major global player will remain just a desire, unless it engages with its immediate neighborhood more meaningfully. In this context, the initiative by the Indian government to allow easy access to Bangladeshi goods is more than welcome. However, Bangladesh also needs to return to its roots of secular, tolerant traditions of Islam and counter Islamic radicalism more forcefully. It has been rightly observed that the unchecked rise of religious extremism now happening in Bangladesh bodes ill for the country, its neighbors, and indeed the world (Ganguly, 2006). A failed state, Bangladesh, is no one’s interest, but while India and the rest of the international community can help it, the bulk of the burden for extricating itself from the morass that it has sunk into will have to be borne by Bangladesh itself.

NOTES 1. A useful account of Indo–Pak war of 1971 can be found in Ganguly (1994). 2. For a detailed explication of this point, see Hashmi (1994). 3. For an example of how smaller South Asian states have used China as a leverage in their dealings with India, see Dabhade and Pant (2004). 4. A brief history of the tenuous nature of civil–military relations can be found in Kukreja (1991). 5. On the militarization of Bangladesh’s politics, see Mohsin (2001, pp. 33–41). 6. For a background on Jamaat’s ideology and programme, see Razia Akhter Banu (1994). 7. The Group of Ministers Report on National Security is available at http:// mod.nic.in/newadditions/rcontents.htm 8. For a survey of the problems in Chittagong Hill Tracts, see Shelley (1992). 9. See, e.g., the 74-page report ‘‘Growing Fanaticism and Extremism in Bangladesh: Shades of the Taliban,’’ on the official website of the Awami League at www.albd.org/aldoc/growing/growing.fanaticism.pdf 10. A detailed profile of JMB can be found in Singh (2004). 11. This view has been articulated very forcefully by a former foreign secretary of Bangladesh Farooq Sobhan (see his paper Sobhan, 2004).

246

HARSH V. PANT

REFERENCES Abdi, S. N. M. (2005). Indo-Bangla ties nosedive after SAARC Rebuff. Arab News, February 22. Ayoob, M., & Subrahmanyam, K. (1972). The liberation war (pp. 165–181). New Delhi: S Chand & Co. Bhatt, S. (2006). ISI now outsources terror to Bangladesh. India Abroad, March 21. Chatterjee, D. (2006). Bangladesh projects: Tatas to give final offer by month-end. Indian Express, March 21. Choudhury, S. (2006). Not that foreign issue. Hindustan Times, April 5. Dabhade, M., & Pant, H. V. (2004). Coping with challenges to sovereignty: Sino-Indian rivalry and Nepal’s foreign policy. Contemporary South Asia, 13(2), 157–169. Ganguly, S. (1994). The origins of war in South Asia: Indo-Pakistani conflicts since 1947 (pp. 81–116). Boulder: Westview Press. Ganguly, S. (2006, March 30). A new challenge for Bangladesh. Yale Global Online, Available at http://yaleglobal.yale.edu/display.article?id¼7196 Hashmi, Taj ul-Islam. (1994). Islam in Bangladesh politics. In: M. Hussin & Taj ul-Islam Hasbmi (Eds), Islam, Muslims and the modem state (pp. 100–138). New York: St. Martin’s Press. Hassan, S. (1991). Environmental issues and security in South Asia. Adelphi Paper 262. Brassey’s for International Institute for Strategic Studies, London. Hindustan Times. (2006). Bangladeshi infiltration deeply affecting Assam: BJP, March 27. Hossain, M. (2006). The rising tide of Islamism in Bangladesh. Current Trends in Islamist Ideology, 3, 67–77. Iftekharuzzaman. (1998). Bangladesh: A weak state and power. In: A. Muthiah (Ed.), Asian security practice: Material and ideational influences (p. 317). Stanford: Stanford University Press. Indian Express. (2006). India, Bangladesh stand united against terror, March 22. Iyer, M. (2006). Zia’s visit Ill timed? Hindustan Times, March 21. Jacques, K. (2000). Bangladesh, India, and Pakistan: International relations and regional tensions in South Asia (pp. 3–24). New York: St. Martin’s Press. Jane’s Foreign Report. (2005). Terrorism in Bangladesh January 27. Kukreja, V. (1991). Civil-military relations in South Asia. Delhi: Sage. Lakshman, K. (2005). Islamist extremist mobilization in Bangladesh. Terrorism Monitor, 13(12), 6. Maitra, R. (2003). Prospects brighten for Kunming Initiative Asia Times Online. Available at http://www.atimes.com/atimes/SouthAsia/EBI2DfO4.html Mohan, C. R. (2006). Five fold embrace for Khaleda. Indian Express, March 20. Mohsin, A. (2001). Governance and security: The experience of Bangladesh. In: P. R. Chari (Ed.), Security and governance in South Asia. New Delhi: Manohar Publishers. Niazi, T. (2005). China’s march on South Asia. China Brief, 5(9). Parthasarthy G. (2006, March 27) Rhetoric divorced from reality South Asia Intelligence Review, 4 (37), Available at http://www.satp.org/satporgtp/sair/Archives/4_37.htm# assessment3 Perry, A. (2006). Rebuilding Bangladesh. Time, Asia, April 3. Rahim, E. (2001). Bengali Muslims and Islamic fundamentalism. In: R. Ahmed (Ed.), Understanding Bengali Muslims (pp. 235–239). New Delhi: Oxford University Press. Rajamohan, P. G. (2006). Recent developments in Bangladesh: Implications for I security. Institute of Peace and Conflict Studies, January 11, 2006, Article-no. 1921, Available at http://www.ipcs.org/ipcs/ipcsSeminars2.jsp?action ¼ showView&kValue ¼ 1934

India and Bangladesh: A Relationship Adrift

247

Ramachandran, S. (2005). India finds gas and friends to the east. Asia Times I Online, Available at http://www.atimes.com/atimes/SouthAsia/GA20DfO4.html Razia Akhter Banu, U. A. B. (1994). Jamaat-i-Islami in Bangladesh: Challenges and Prospects. In: H. Mutalib & Taj ul-Islam Hashmi (Eds), Islam, Muslims, and the Modem State (pp. 80–99). New York: St Martin’s Press. Routray, B. P. (2005). India-Bangladesh ties: Set for a revival? Institute of Peace and Conflict Studies, Article no. 1821, Available at http://www.ipcs.org/South_Asia_articles2. jsp?action ¼ showView&kValue ¼1934&country ¼ 1016&status ¼ article&mod ¼ a Sengupta, R. (2005a). Why India is concerned about Bangladesh? India Abroad, December 22. Sengupta, R. (2005b). Bangladesh: Next terror frontier? India Abroad, December 19. Sengupta, R. (2005c). Delhi-Dhaka direct dialogue must, says envoy. India Abroad, December 26. Sengupta, R. (2006). The truth about Bangladesh’s Hindus. India Abroad, March 22. Shelley, M. R. (Ed.) (1992). The Chittagong Hill Tracts of Bangladesh: The untold story. Dhaka: CDR. Singh, S. (2006). Bangla terror group behind Varanasi blasts, Says STF. Indian Express, April 6. Singh, S. (2004). Jamaat-ul- Mujahideen: A profile. Institute of Peace and Conflict Studies, Article no. 1921, Available at http://www.ipcs.org/South_Asia_articles2.jsp?action ¼ showView&kValue ¼1934&country¼1016&status¼ article&mod ¼ a Sobhan, F. (2004). India-Bangladesh relations: The way forward. Available at http://www. bei-bd.orBdocs/fs9.pdf Tarapot, P. (1993). Insurgency movement in north eastern India (pp. 127–146). New Delhi: Vikas Publishing House. Thapliyal, S. (1999). India-Bangladesh transportation links: A move for closer cooperation. Strategic Analysis, 22(12). The Economist. (2001, September 27). A vote for Bin Laden?

This page intentionally left blank

POLITICAL DIMENSIONS OF ISLAMIC FUNDAMENTALISM IN SOUTH ASIA Kalim Bahadur ISLAMIC FUNDAMENTALISM The term ‘fundamentalism’ has come of late into popular usage more than any other. It has been used for various Christian movements. During the twentieth century, the term came to be used in Christian–Protestant circles in an effort to define beliefs that are fundamental to Christian religion. The world that emerged after the Second World War saw the emergence of many former colonial and semi-colonial countries as independent nations. Their development caused ferment among the Muslim countries also. It took the form of a resurgence of fundamentalism, Islamic fundamentalism. During the last several decades, the Islamic revival that is sweeping from Morocco in the West to Mindanao in the Philippines is considered with some reason as a response to the predatory policies of Western imperialism. This was the reassertion and the response of the Muslims to the challenge of the West. This was the promise of the fundamentalist Muslims: self assertive Islamic nationalism and simplicity of argument in the hope of recapturing the pristine purity and political glory of Islam (Ahmad, 1991). The first Muslim to react against the alien accretions to Islamic society, not necessarily the result of external or foreign influence, was Shah Waliullah (1703–1762) who

Conflict and Peace in South Asia Contributions to Conflict Management, Peace Economics and Development, Volume 5, 249–266 Copyright r 2008 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1572-8323/doi:10.1016/S1572-8323(08)05016-9

249

250

KALIM BAHADUR

was almost a contemporary of Abdul Wahab (1703–1787) in Arabia. Both evolved from attempting to purge the Islamic society of foreign accretions to protesting oppression and corruption of Westernisation (Jansen, 1979). The fundamentalism today is different from that of the eighteenth century. It is not of much use to trace historical continuity in the fundamentalist ideology; although, this does not negate some linkages between Islam’s past history and modern day fundamentalist movements (Ahmed, 1994). Islamic fundamentalism, as indeed fundamentalism of any religion, implies going back to the original sources and roots of Islam. It has its own constant, immutable, and clearly defined nature. It means commitment to the original principles of Islam in their literalist interpretations as fundamental and unchanging beliefs, thus transcending all social, economic, political, and cultural transformations ever since the emergence of Islam 14 centuries ago (Haque, 1992). The Ulama demand complete and total implementation of the Shariah without regard to the nature of the political system; this is fundamentalism stricto sensu, which also requires place of power (Roy, 1995). The term Islamic fundamentalism is used in a wide variety of meanings and different Islamic movements. Thus, it is used synonymously with revivalism, Islamism, political Islam, etc. In the media and in common parlance, it is mistakenly used for communalism, extremism, and orthodoxy. Broadly, those Islamic movements that call for going back to scriptures could be considered as fundamentalist (Maley, 1999). Contemporary Islamic fundamentalism is distinguished by two currents; one is traditionalist and accepts continuity between the original scriptures and their commentaries. It follows strictly the texts and refuses to innovate or reinterpret. The other is reformist fundamentalism, which criticises tradition, the commentaries, and popular religious practices (Roy, 1995, pp. 30–31). Islamic fundamentalism is also seen in two forms; one is radical fundamentalism and the other conservative fundamentalism. The followers of radical fundamentalism are militant and aggressive because they believe that the Muslim elites, the state, and the classes are incapable of bringing about any change in the existing society. The second type, i.e., the conservative fundamentalists, are supporters of the status quo (Haque, 1992). Most fundamentalists agree that Western civilisation and its models of political and social systems have failed, and there was need for overthrowing the cultural and political domination that is based on secularism, materialism, and the need to return to the ideals and goals of Islam and the doctrine of the unity of God, i.e., belief that religion is integral to politics and society and the introduction of Shariah law (Esposito, 1984).

Islamic Fundamentalism in South Asia

251

ABUL ALA MAUDUDI There have been three leading ideologues of Islamic fundamentalism in modern times, namely, Mawlana Abul Ala Maududi (1903–1979), Ayatollah Khomeini (1902–1989), and Syed Qutb (1906–1966). They belonged to three different countries with different histories and cultural backgrounds. All three of them have influenced Islamic movements in the Muslim world. Mawlana Abul Ala Maududi was neither sent to an Islamic madrassa nor to an English school. He was educated mostly at home. His early experience of politics was his participation in the Khilafat movement in 1919. He also took part in the satyagraha movement led by Mahatma Gandhi in the same year. He wrote his first important book al Jihad fil Islam in 1930. He explained the objective of the book as the need for objectively describing Islamic teachings and its rules of jihad and war (Ali, 1980). In his book on jihad, he had taken the traditional viewpoint of the Ulama who define jihad as warfare in defence of Islam, its honour, and Muslims as a whole (Bahadur, 1977). Maududi believed that civilization, by which he meant capitalism, socialism, and communism, would only lead to its doom. Only the ideology of Islam could salvage it. But a right ideology needed a right party (Bahadur, 1977, p. 134). The central idea of Maududi’s ideology is the transcendence of the Islamic law. It is the only law, the Sharia, imposed from above by God, who is the only lawmaker (Grare, 2001). However, Maududi believed that society could be Islamised only through social and political action. For this, mass movement had to be launched. The Islamic movements should aim at seizing power (Roy, 1995, p. 36). Maududi believed that Islam was not only a way of life but also a complete code of life (Mahmood, 1995). He was the first Islamic scholar who argued that Islam was a complete system of politics, economics, and culture. The theme of comprehensive Islam pervaded all his writings on social, political, and economic spheres of life. He believed that Shariah was an organic set of regulations that ruled every aspect. Though he appeared to be against any change in Shariah, he did accept the possibility of advancement and evolution in it to meet the needs of humanity in every age. His concept of establishment of religion meant total subordination of all the institutions of civil society and state to the authority of the Shariah. He believed that Islam had given solutions to all the fundamental issues of constitutional law, and that Shariah was a complete scheme of life and an all embracing social order where nothing is superfluous and nothing is lacking (Mahmood, 1995, p. 106; Esposito, 1984, p. 145). Maududi believed that Pakistan had been achieved exclusively for becoming an Islamic state (Maududi, 1955a). For

252

KALIM BAHADUR

this, he suggested that Pakistan should declare that sovereignty in Pakistan belongs to God almighty, and that the government of Pakistan shall administer the country as agent, and that the basic law of the land is the Islamic Shariah, and further that the State in exercising its power shall not be competent to transgress the limits laid down by Islam (Maududi, 1955a, p. 107). Maududi limits God’s sovereignty to a limited part of the entire universe: the Islamic state of Pakistan. He also ignored the fact that the God of the Quran is not an exclusive God (Ahmed, 1985). Maududi had also described in detail his views on jihad, which were not radically different from those of the other Islamic scholars as a means to achieve his objective: an Islamic state. Maududi shares with other Islamic scholars his emphasis on the jihadi paradigm, the belief in jihad as a means to achieve the Islamic state. According to Maududi, jihad was the use of violence as an element of general strategy. Contrary to the impression from the earlier writings of Maududi that he was against the use of violence to achieve its political objectives, the Jama’at has in fact not been averse to using the coercive power of the masses or that of the state to promote its political programme.

SYED QUTB The writings of Maududi were disseminated by the Jama’at-i-Islami’s well organised propaganda and translation department throughout the Muslim world. Syed Qutb, an Egyptian, was another ideologue of Islamic fundamentalism. He was influenced by Hasan al Banna (1906–1949), and Maududi. He had imbibed Maududi’s views on God’s governance, jihad, and the revolutionary character of Islam.1 He also, like Maududi, believed in Islam being perfect and a complete code of life. Men should fight for the cause of God so that His wishes become absolute. Muslims should struggle against those who do not obey God’s will (Mahmood, 1995, p. 119). Syed Qutb was critical of Western culture and said that it had already lost its effectiveness. Syed Qutb thought that Islam stood for freedom of men from slavery to other men and his desires, which is also a form of slavery. He appeared to be an extremist who advocated the destruction of un-Islamic governments. He took a radical and aggressive approach in his writings. In order to implement the real Islam, there should be a party dedicated to fight the forces fighting against Islam. Both Maududi and Qutb had sanctioned the use of violence for the establishment of Islam (Mahmood, 1995, p. 129). This has been one of the inspirations of the present day Mujahideen to justify terrorist violence in many countries. Qutb believed that tyranny only

Islamic Fundamentalism in South Asia

253

could be fought through the use of force. According to another view, Syed Qutb’s key contribution was that he redefined the Islamic ideal of jihad. The traditional understanding of the Islamic principles of jihad in its military sense was a war of defence against nonbelievers. Syed Qutb argued not only that jihad was an offensive war but also that it could also be waged against internal enemies, including the state, if it had lost its legitimacy (Khan, 2007). Syed Qutb had differed from the Sunni belief that revolt against the ruler was sinful. He was for a relentless fight against the revival of Western culture in any form. Like Maududi, he was against parliamentary democracy. Qutb believed that the Quran was the complete moral code to regulate all human actions to the exclusion of all other laws. The political system should be based on the Quran. He believed that an Islamic state would be a social welfare state. Qutb’s view on ignorance (Jahiliya) is the central theme of his philosophy. He divided societies into two kinds: Islamic and ignorant. Ignorant are those that are without the values of Islam and the Islamic way of life and hence are illegitimate. The ruler must govern in accordance with the values of Islam.

AYATOLLAH KHOMEINI Maududi and Qutb represented the Sunni Islamic fundamentalism while Ayatollah Khomeini Shia represented a version of the same. Like other Islamic scholars, Khomeini believed in the perfection of Islam and that it had nothing to learn from alien ideologies. His basic concept of Islam was that it was a religion of militancy and was dedicated to truth and justice. He believed that politics was a religious task of which the goal was the establishment of an Islamic state (Mahmood, 1995, p. 78). In the period before revolution, his main target was imperialism. For him, Western imperialism and Israel were the main enemies of Islam. He thought that imperialism aimed at separating religion from politics. With the decadence of the regime of the Shah of Iran, Khomeini ceased to call him a Muslim and began to denounce him as anti-Islamic and therefore gave a call for a jihad against him by the people of Iran (Esposito, 1984, p. 189). Khomeini rejected monarchy and said an Islamic state will be ruled by religious authorities. Maududi had suggested that an Islamic state cannot be run by those who do not know Islam as an argument against non-Muslims being given equal rights in an Islamic state. Khomeini spelt his concept of the Vilayat-e Faqih, which meant the rule by Islamic jurists. It implied that the Ulama should exercise the authority of the Twelfth Imam.2 Khomeini

254

KALIM BAHADUR

stressed the place of jurists (fuqaha) in his vision of the Islamic state. He wanted the jurists to employ the state institutions to administer Shariah laws and create a just Islamic system. He argued that since jurists were the only authentic experts on the Islamic law, they would rule the state. In Khomeini’s notion of the governance of jurists, which is also an example of the appropriation of the philosophical/Islamic ideal for a specific political programme, Khomeini argues that the jurists (fuqaha) are the true representatives of the hidden Imam. As such in Khomeini’s activist appropriation of the Islamic philosophical tradition, a just jurist (fuqaha) is not only the authority in religious and legal matters but also the perfect political leader.3 It is clear that all three ideologues of Islamic fundamentalism were not in favour of popular democracy and the Islamic state will be governed by selected Ulama. The confusion and different interpretations among the Ulama, on the minor issues, even about the definition of a Muslim does not promise to be a very happy situation in that Islamic state.

JAMA’AT-I-ISLAMI OF PAKISTAN Islamic fundamentalist parties in South Asian countries have been deeply influenced by the ideologies of Maududi, Qutb, and Khomeini. The fundamentalist movement originated in the eighteenth century in the wake of the decline of the Mughal rule in India. Shah Waliullah believed that the decline of Muslims in India came about by the accretions of alien religions (Hindu) and traditions (Prasad, 1999). He criticised the traditions, the commentaries, popular religious practices, the cult of saints, deviations, and superstitions (Roy, 1995, p. 31). One of the most renowned followers of Shah Waliullah and a pupil of his son Shah Abdul Aziz (1746–1824) was Sayyid Ahmad Barelvi (1786–1831). His objective was that jihad was not aimed at freeing India from foreign rule but setting up of an Islamic state, which he did in Sittana, a small village, now in the North Western Frontier Province in Pakistan. He wanted to establish the supremacy of Shariah over it (Hardy, 1972). Sayyid Ahmad’s movement came to a brutal end in 1831, but the influence of his ideas remained alive. Some of the survivors of his movement later set up the famous seminary at Deoband in 1867. Deoband’s influence gave birth to several groups: the Jamiatul Ulama-i-Hind, Tablighi Jama’at, the Ahle Hadith, the Taliban, and even the Jama’at-i-Islami has been influenced by it (Metcalf, 2007). Islamic fundamentalism is espoused by several parties and groups in South Asia. Though Jamiatul-Ulama-i-Hind, which was set up in the early

Islamic Fundamentalism in South Asia

255

1920s in India, is the largest fundamentalist party that has several offshoots in Pakistan and has also influenced several groups in other South Asian countries the Jamiat traced its ideological lineage with the Islamic movement, which led to the setting up of the Deoband seminary. They believed in the implementation of the Shariah in free India while they waited for the institution of Khilafat to be restored in the Islamic world (Hardy, 1972, p. 193). Jamiatul-Ulama-i-Hind was split in 1945 when some Ulama formed a parallel body called the Jamiatul-Ulama-i-Islam, which supported the Muslim League demand for Pakistan. In Pakistan, Jamiatul-Ulama-iIslam traces its origins to the Deoband School, while the Jamiatul Ulama-iPakistan is dominated by the Barelvi School. The Jama’at-i-Islami, which was set up in 1941 under the leadership of Mawlana Abul Al Maududi in India, has offshoots in Pakistan and Bangladesh. Maududi emerged as the most systematic thinker of modern Islam. According to Wilfred Cantwell Smith, Maududi’s Islamic system is derived from Islamic history from ‘whose flow he abstracts for his static pattern.’ It also owes something, however, to modern concepts and potentialities so that he differs significantly from the unaccommodating traditionalists (Smith, 1977). The establishment of an Islamic state under the sovereignty of God was the central focus of Maududi’s political programme. The Islamic state, according to Maududi, would be ‘an all powerful monolithic state,’ upholding a definite religious ideology and using the full weight of police and judicial powers to ensure that all aspects of its life will reflect the character of its Islamic ideology (Adams, 1966). Maududi argued that Pakistan was achieved in the name of Islam: therefore, it was only logical that an Islamic constitution be enforced in the new state. He ignored the fact that he had opposed the concept of Pakistan as, according to him, it was against Islam. His concept of the nation was that all Muslims, irrespective of race, nationality, and language were a nation apart. He thought that territorial and racial nationalism would destroy the feeling of Islamic nationalism. He opposed the concept of composite nationalism in India. According to Maududi, the Indian National Congress was wrong, which wanted the merger of all the nations into one country where different nations inhabit national unity. Maududi believed that every nation based on religion should have complete autonomy. According to him, Islamic nationalism was different from Muslim nationalism. Mawlana Maududi opposed the nationalist Ulama organised in the Jamiatul Ulama-i-Hind because they believed in territorial nationalism. Maulana Hussain Ahmed Madani, the then head of the Deoband seminary, had said that nations are founded on homelands and are not founded on the

256

KALIM BAHADUR

basis of race or religion (Pirzada, 2000). This statement by Maulana Madani received a stinging response from the famous poet Muhammad Iqbal (Pirzada, 2000). Maududi opposed the demand for Pakistan in spite of his belief that Muslims were a separate nation. He believed that Muslims of the world constituted a nation, and Muslims of India were a part of that nation. He said that in being a Muslim he was not at all interested that Muslim governments were formed in areas where Muslims were in a majority. For him, he said, ‘the most important question is whether in your Pakistan the system of government will be based on the Sovereignty of God or on popular sovereigntyy’. Muslim nationalism, he claimed, was as reprehensible in the Shariah of God as Indian nationalism (Maududi, 1942). With the approach of the independence and partition of India, Maududi’s opposition to Pakistan became even more strident. In April 1947, Maududi declared that the Muslim League had made the establishment of Pakistan in a corner of India their highest ideal: ‘If those people stood up as the representatives of Islam with real sincerity the entire India could become Pakistan’.4 He believed that the fundamental thoughts, structure, temper, spirit, tactics, and objectives of the Pakistan movement were those of a nationalist movement. When Pakistan came into being amidst bloodshed and violence, Maududi denounced it in the harshest words, ‘If they were the birth pangs they were predicting the birth of a monster’. Maududi and the Jama’at tried strenuously to delete the memory of his opposition to Pakistan after he arrived in the new country in August 1947. Large portions of books carrying his denunciation of Pakistan were expurgated in the new editions. Various clarifications were given to explain away their criticism of the Pakistan movement. After 14 August 1947 when he arrived in Pakistan, Maududi took the stand that Pakistan had been demanded in the name of Islam, and since it had become a reality then it should be made into an Islamic state. He started his campaign for the promulgation of an Islamic Constitution and the implementation of Shariah in Pakistan. The Muslim League leaders had never spelt out what political system would be introduced in Pakistan. While the leaders were mostly ambivalent the rank and file was sustaining the movement on vague Islamic slogans. The result of this confusion was that Pakistan was being taken by the common man as, though it is not, an Islamic State. This belief has been encouraged by the ceaseless clamour for Islam and the Islamic State that is being heard from all quarters since the establishment of Pakistan (Munir, 1979). The Jama’at alone among all the religious parties was clear on what should go into the constitution to make it Islamic. He had laid down the essential principles of an Islamic Constitution

Islamic Fundamentalism in South Asia

257

in lectures delivered early in 1948. The Constituent Assembly of Pakistan passed the Objectives Resolution on March 12, 1949, which was a carefully drafted document despite the opposition from a section of the members. It was imprecise and sought to please both the Ulama and the modernists (Binder, 1961). But the Constituent Assembly was dissolved by Governor General Ghulam Mohammad in 1954. Maududi was however satisfied with the 1956 Constitution. It was a surprise, as a cursory glance would suggest that the Objective Resolution was only the Preamble in the new Constitution. Most of the Islamic provisions had been relegated to the Directive Principles, and they were not enforceable in a Court of Law. In early 1953, the anti-Ahmadiyya agitation provoked by the Ahrar and later supported by other Islamic parties raised some important issues relating to the Islamic polity in Pakistan. Ahmadis were the followers of Mirza Ghulam Ahmad of Qadian, a town in Punjab in India. They are known as Ahmadis, Qadianis, and pejoratively as Mirzais. The Ahrar were an offshoot of the Congress and were known for their baiting of the Ahmadis.5 They had also opposed Pakistan and were out of favour in the country. It was the Majlise Ahrar that had raised the demand for declaring the Ahmadis as non-Muslims soon after independence. The campaign against the Ahmadis was abetted by the Punjab government for factional reasons against the central government in Karachi. Gradually, the campaign led to an outburst of violence against the Ahmadis. The government declared Martial Law in Lahore, and the disturbance was quelled within a few hours. The Punjab government appointed a Court of Inquiry to go into the causes of the disturbance and fix responsibility. The Commission comprised two judges of the High Court, namely Justice Muhammad Munir and Justice Kayani. The Commission, apart from going into the causes of the disturbance, went into the ideological issues relating to the Islamic State. They questioned the Ulama of almost all schools of Islam about some basic questions, which included the definition of a Muslim, the rights of nonMuslims in an Islamic state, would a non-Muslim country in the neigbourhood of an Islamic state be a dar ul harb, should the Muslims of India have the same ideology as that of Muslims in Pakistan, etc. (Munir, 1979, pp. 58–67). It was not surprising that the learned judges found that no two Ulama agreed on any one answer to each questions asked. If the Ulama claimed that the Ahmadis were not Muslims, that meant, they knew the definition of a Muslim. However, no two Ulama agreed on the definition of a Muslim (Munir, 1979, p. 69). The Ahmadis were not declared out of the pale of Islam in 1953 when the Prime Minister of Pakistan was Khwaja Nazimuddin who was a pious Muslim and believed that Ahmadis were not

258

KALIM BAHADUR

Muslims. But he had been educated at Oxford, which had inculcated in him the faith that religion has nothing to do with the business of the state. However, in 1974 the National Assembly of Pakistan which was elected on a secular basis and Prime Minister Zulfikar Ali Bhutto, who was not known for his religiosity, declared the Ahmadis non-Muslims. With the promulgation of the Martial Law in October 1958, a new phase began in the life of the Jama’at-i-Islami. The country had entered a new era when military regimes and elected governments alternated. The Ayub regime was followed by the Yahya military regime that was succeeded, for the first time in the history of the country, by the elected government of Zulfikar Ali Bhutto. The Jama’at-i-Islami carried on a relentless campaign against Bhutto for his Socialist agenda as they had declared socialism to be against Islam. The Jama’at had denounced the Ayub coup, and it remained in constant confrontation with it. Ayub had banned the Jama’at along with other political parties. The Jama’at found itself in confrontation with the Ayub regime on the issue of the Muslim Family Laws Ordinance. The Jama’at found itself against each and every article of the Ordinance. The views of the Jama’at on the questions of polygamy, divorce, and inheritance by the children of predeceased parents were not different from those of the traditional Ulama. The Ordinance gave greater rights to women in marriage. The Jama’at considered the Ordinance as a gross interference in Muslim Personal Law. The Ordinance had been welcomed by the population especially by women. Ayub hit back at the Jama’at and Mawlana Maududi. The Jam’at was banned on 6 January 1964, and its leaders were arrested. It was during this period that Mawlana Maududi had to make a major compromise with his ideology. The opposition parties during the election for the President in 1965 had decided to put up Fatima Jinnah, sister of Mohammad Ali Jinnah, against Ayub Khan. Maududi was in prison when the decision was taken, while other religious parties decided to support Ayub, as according to them Islam does not permit woman to be the head of the government or the state. Maududi decided that the Jama’at would support Miss Fatima Jinnah. Maududi’s decision created a sensation in the Jama’at circles. Maududi had written a detailed book titled, Pardah (Maududi, 1951) in which he had given extensive arguments on why women cannot be entrusted with the offices of head of the government and the state. However, Maududi and later other Jama’at leaders argued that some of the things were declared impermissible in the Shariah that are permanent and absolute, but there are some others that are also impermissible but are allowed in case of necessity. Ayub’s hostility to the Jama’at-i-Islami was telling on the functioning of the party, and therefore they wanted some

Islamic Fundamentalism in South Asia

259

reconciliation with it. It was clear that Ayub was a rightist, and this provided some ground for rapprochement between the Jama’at, which was also rightist in its ideology. One leader of the Jama’at therefore pointed out in a journal that there was no reason for the hostility between the two as the benefit will go to the communists.6 The toppling of the first elected Prime Minister of Pakistan by General Zia-ul-Haq was welcomed by the Jama’at because he had promised to introduce the Islamic order in Pakistan (Ahmad, 1991, p. 479). The Jama’at believed that General Zia-ul-Haq was sincere in his intentions to implement the Islamic system of their dreams. It was the first time that the Jama’at became a part of the government. The then head of the Jamaat Tufail Muhammad was a close advisor of the General. In August 1978, the Jama’at joined the government with some other parties when Zia-ul-Haq’s wanted to civilianise the government while Martial Law was still in force. Four leaders of the Jama’at were inducted into the cabinet; the first experience of being in power turned out to be bitter for the Jama’at. The Jama’at ministers once in office realised that they had almost no power. The real power rested in the hands of the bureaucrats and the military officers. The civilian ministers resigned within 8 months in April 1979, a few days after Zulfikar Ali Bhutto was hanged after a farcical trial. The Jama’at leaders realised they had been taken for a ride by General Zia to give civilian legitimacy to the execution of Bhutto. General Zia-ul-Haq did introduce some Islamic measures. His speeches and exhortations seemed to come right from the pages of Maududi’s books (Ahmad, 1991, p. 480). However, later there were tensions between the General and the Jama’at on various political issues. The government banned student organisations, which included the Islami Jamiat Tulaba, the students’ wing of the Jama’at. The Islami Jamiat Tulaba was well armed and used violence against student organisations of other political parties. They had captured the student unions in most Universities by brazen use of force. During the period 1988–1999, Pakistan had four elections. The Jama’at contested the elections under the leadership of its new head, Qazi Hussain Ahmed. Now the Jama’at was resorting to all the tactics of a normal political party that were unthinkable three decades ago. Its percentage of votes did not cross more than 7 or 8 percent. It was during this period that the Jama’at had been involved in war in the name of jihad in Afghanistan and in the Indian state of Jammu and Kashmir. The war in Afghanistan was funded by the Saudis, and weapons came from the United States and were distributed to favourite terrorist groups of the ISI and the Jama’at-i-Islami. In fact, the Jama’at-i-Islami of Pakistan played an important role in the

260

KALIM BAHADUR

jihad in Afghanistan and Pakistan’s sponsored terrorist campaign in Kashmir (Mir, 2006). In 1999, General Pervez Musharraf toppled the government of Nawaz Sharif and an election was held in 2002. The Jama’at was a constituent of the front of six religious parties called the Muttahida Majlis-e-Amal (MMA). The MMA had the support of the military agencies as they wanted to defeat the Pakistan Peoples Party (PPP) and the Pakistan Muslim League led by Nawaz Sharif. The Jama’at and the MMA supported the 17th Amendment to Constitution, which helped Musharraf to strengthen his grip on power including the provision for holding the dual office of the President and the Army Chief. The government agencies helped the MMA to use official machinery in the election. For the first time in the history of the country a religious political group emerged into the third position in the National Assembly. The MMA had also secured a majority in a crucial province, the North Western Frontier Province. It was no secret that the MMA could not have won without the direct and indirect support of the agencies. It is the support of the MMA government that plays an important role in the resurgence of the Taliban and the militants in Waziristan and Swat.

THE JAMA’AT-I-ISLAMI BANGLADESH The disenchantment of Bengalis with Pakistan had begun soon after the imposition of the Urdu language in East Pakistan. Bengalis comprised the majority of the population in Pakistan, and the economic gap between the two wings widened by the central government’s discriminatory policies against East Bengal. Bengalis were underrepresented in the services and in the armed forces. Maududi had spoken repeatedly against nationalism as contrary to Islam. He could not understand the alienation of the Bengali Muslims from the Pakistani political system. At the time of the partition, the Jama’at had only one member in East Pakistan. It reached 38 by 1954 (Jilani). The Jama’at could not sympathise with the grievances of the people of East Pakistan. Maududi agreed with the demand of the Bengali people on the language issue and believed that it should have been acceded to. However, he alleged that communists, Hindus, and political adventurers took advantage of the problem. Maududi included all the opposition parties under the term ‘political adventurers’. Thus, Maududi was in fact saying that anybody who championed the cause of the Bengalis was a communist, a Hindu, or a political adventurer?

Islamic Fundamentalism in South Asia

261

Maududi believed that Islamic activists and Ulama should educate the masses of East Bengal and remove their ignorance of Islam, ‘because the influence of Hindu culture over the their language, dress, habits, and way of thinking was so exceedingly (sick) great that they have lost all sense of its being an extraneous element in their life (Maududi, n.d.).’ He was, in other words, alleging that Bengali Muslims were ignorant of Islam and were under the influence of Hindus. Maududi assumed that West Pakistani Muslims were better Muslims than those of East Bengal. It was not surprising that during the liberation struggle of Bangladesh the people of East Bengal were more hostile to the Jama’at-i-Islami than to the people of West Pakistan because they only wanted to continue their domination of the eastern wing whereas the Jama’at-i-Islami that was questioning their Islam (Bahadur, 1977, p. 131). During the crackdown of the Pakistan armed forces on the Bengali nationalists, the Jama’at organised a militant outfit called the Al Badr as collaborators of the Pakistan army and carried out large scale killings of the Bengali patriots. It was natural that the Jama’at was banned by the free government of Bangladesh and could revive itself only with the help of the military regime of Gen. Ziaur Rahman (Bahadur, 1994). The Jama’at had succeeded in securing large funds from Saudi Arabia and launched propaganda against the anti-Islamic nature of the movement for Bangladesh (Ahmed, 1994, p. 698). By the early 1980s, the Jama’at had been able to revive itself in the country with a well-spread organisation. Use of violence against its opponents was common. After the restoration of the democratic process in 1991, the Jama’at was able to get representation in the government of Khalida Zia. This helped it to become a political force in the country. This was also the period when several militant Islamic groups emerged in Bangladesh. Some of these groups, though sharing the ideology of the Jama’at, are not ready to wait and have already started a jihad to set up the Islamic state in Bangladesh. The most notorious is the Harkat ul Jihad-i-Islami (HUJI), which was set up with the help of the Al Qaida in 1992 (Karlekar, 2005).

JAMA’AT-I-ISLAMI HIND After the partition, the Jama’at-i-Islami Hind was set up in April 1948 at Allahabad under the leadership of Mawlana Abul Lais Nadvi who had been nominated as his successor in India by Maududi himself. He was considered close to Maududi before partition. There were 240 members in the Jama’at at the time of its reorganisation in India. Maududi had given some guidelines for the Jama’at workers in India at the April 1947 session of the

262

KALIM BAHADUR

Jama’at at Madras. He refused to accept the objective of the India National Congress of a secular and democratic India. Therefore, he predicted that the state in India would be a Hindu national state. He had gone a step further and had advised the Hindus in India to build their country in accordance with the teachings of Ram and Krishna (Maududi, 1955b). He could not even visualise that India would be a successful secular democratic state. He believed that no nation (religious community for Maududi) could tolerate the existence of another nationality. To Maududi, secularism meant that God and religion only relate to a man’s private life, and he considered this absurd. Abul Lais Islahi believed secularism to be abhorrent since it was not a theory limited to only few aspects of life but was operative in all walks of life. Later, they modified their definition of secularism. The Jama’at was against the aggressive secularism that purges a man’s private life of all Divine Guidance. The Jama’at recommended that the term be avoided even in its limited meaning. Abul Lais had declared in 1957 that democracy cannot escape from nationalism from which arise national conflicts in the world.7 This led them to declare participation of Muslims in the election in India as harmful to the Muslims. According to the Jama’at, it was imperative for the Muslims to keep away from the elections and devote themselves to the highest objectives.8 Later they changed their stand and even decided to set up some candidates in the 1967 elections. Their published programme for 1972–1976 declared that at the proper time, within the framework of their principles, the Jama’at could participate in the elections. The Jama’at could not understand that Muslims in India were facing a variety of social, economic, and political problems, which would not be solved by following its sterile policy of keeping out of the political process. In the late 50s, the Jama’at felt the necessity of a Muslim political party. The Jama’at said that Muslims are looking for a new party that will try to tackle all the problems of Muslims such as personal law, laws that impinge on their religious beliefs, religious education, the Muslims’ economic, political conditions, the treatment of Muslims by the ruling party, etc.9 This initiative of the Jama’at materialised as the Majlis-e-Mushawarat, which was set up after an All India Muslim Convention held in August 1964. However, owing to conflicts within the new party the Majlis-e-Mushawarat declined in the 70s.10 The Jama’at was banned in July 1975 after the declaration of emergency by the Indira Gandhi government. Large numbers of Jama’at workers and leaders were arrested. During their incarceration, the Jama’at leader came into contact with the activists of the Rashtriya Swayamsevak Sangh (RSSS). After their release in 1977, both parties supported the Janata Party in the elections that year. Later, their relations cooled down significantly.

Islamic Fundamentalism in South Asia

263

There was no question of ‘setting up of ’ an Islamic state in India; therefore, the Jama’at has limited itself to work to protect the religious interests of Indian Muslims. It has been at pains to defend its mixing of religion with politics. Their opposition to secularism and national integration promotes communalism. The Jama’at in India was not a militant organisation unlike its counter parts in Pakistan and Bangladesh, and yet its advice to its Indian Muslims to keep out of the Indian political process led to their alienation in Indian society, which in turn led to communal riots. Its insistence that the Indian political system is un-Islamic weakens the Indian Muslims’ stake in the secular and democratic polity.

CONCLUSION The Jama’at-i-Islami parties have been working in three counties of South Asia and have been assiduously carrying on campaigns to spread their ideology and programme over the decades, and yet they have not been successful (Ahmed, 1994, p. 698). There has been no precedent of an Islamic State in the history of the Islamic world except for the period during the life of the Prophet and arguably during the first four khalifas. But an Islamic state has been a hazy dream of Muslims through the centuries. The Islamic State of the Jama’at-i-Islami was to be an ‘all powerful, monolithic state, upholding a definite religious ideology and using the full weight of police and judicial powers to ensure that all aspects of life will reflect the character of its Islamic ideology’ (Adams, 1966). However, the Jama’at accepted the 1956 Constitution of Pakistan as an Islamic Constitution. It was an example of flexible adaptation to the changing political situation. This Constitution had something to give both to the supporters of the Islamic Constitution and those who opposed it. By accepting a republican Constitution, Pakistanis have made democracy a part of their actual Islamic state (Smith, 1977, p. 249). In the early years after inception, the Jama’at devoted itself to training and selection of the righteous men and preparing a group of persons who would spread the message of the Jama’at. The party did not disturb the British government, as the Jama’at had vowed to use only democratic and constitutional methods. After independence, the Jama’at-i-Islami in Pakistan transformed itself as a political party that aimed at capturing power. In this quest, it has adopted means that had been earlier condemned as against Islam. Maududi alone had made out a well-argued case for the Islamic state, if one accepted his basic premise. The case of Jama’at’s support to Fatima Jinnah showed that it was willing to compromise on its most

264

KALIM BAHADUR

cherished principles for political objectives. The Jama’at had repeatedly declared that it would abide by the laws of the country. However, it has not hesitated to use violence and had collaborated with Pakistan’s army in its killing spree of the Awami League members in 1971. The Jama’at had almost run Pakistan’s Afghanistan policy during the Zia regime. It had also sponsored several terrorist groups in Jammu and Kashmir. In fact, it has been cooperating with Pakistan’s intelligence agencies in the clandestine war in Kashmir (Haqqani, 2005). Islam is the living religion for millions of people in South Asia. The growing political, social, and economic problems will keep the Jama’at attractive for a section of the people. The goal of the Jama’at to gain control of state power and establish the dictatorship of the party may not find many supporters among the people in South Asia (Ahmed, 1994, p. 699).

NOTES 1. See Esposito (1984, p. 134). For a discussion of Maududi’s influence on Syed Qutb see Bari (1995). 2. Shia Imam Mahdi disappeared in A.D. 874. 3. http://etext.lib.virginia.edu/journals/ssr/issues/volume5/numbe/ssr05_01_e04.htm, accessed on November 6, 2007. 4. Rudad. 5. ‘yAhrar were known for the instability of their ideology, the spell binding power of their speakers, and their victimisation of the Ahmadis.’ Binder (1961, p. 261). 6. Quoted in Mir (1970). 7. Dawat, Delhi, 21 February 1957. 8. Ibid. 9. Ibid., 10 May 1958. 10. Radiance, Delhi, 28 April 1968.

REFERENCES Adams, C. J. (1966). The ideology of Maulana Maududi. In: D. E. Smith (Ed.), South Asian politics and religion (p. 382). Princeton: Princeton University Press. Ahmad, M. (1991). Islamic fundamentalism in South Asia: The Jama’at-i-Islami and the Tablighi Jama’at of South Asia. In: M. E. Marty & R. Scott Appleby (Eds), Fundamentalism observed (p. 461). Chicago: University of Chicago Press. Ahmed, R. (1994). Redefining Muslim identity in South Asia: The transformation of the Jama’at-i-Islami. In: M. E. Marty & R. Scott Appleby (Eds), Accounting for

Islamic Fundamentalism in South Asia

265

fundamentalisms: The dynamic character of the movements (p. 697). Chicago: Chicago University Press. Ahmed, Z. (1985). Maududi’s Islamic State. In: A. Khan (Ed.), The Pakistan experience: State and religion (p. 98). Lahore: Vanguard. Ali, N. (1980). Sayyid Maududi ka ehad (The Maududi era) (p. 19). Lahore: Al Badr Publications. Bahadur, K. (1977). The Jama’at-i-Islami of Pakistan: Political thought and political action (p. 11). New Delhi: Chetana Publishers. Bahadur, K. (1994). The Emergence of Jama’at-i-Islami in Bangladesh. In: S. R. Chakravarty (Ed.), Society, polity and economy of Bangladesh (p. 37). New Delhi: Har-Anand Publications. Bari, Z. (1995). Re-emergence of the Muslim brothers in Egypt (pp. 58–59). New Delhi: Lancers Books. Binder, L. (1961). Religion and politics in Pakistan (p. 153). Berkeley: University of California Press. Esposito, J. L. (1984). Islam and politics (p. 154). New York: Syracuse University Press. Grare, F. (2001). Political Islam in the Indian subcontinent: The Jama’at-i-Islami (p. 20). New Delhi: Manohar. Haqqani, H. (2005). Pakistan: Between the mosque and military (p. 289). Lahore: Vanguard Books. Haque, Z. (1992, February 14). Islamic fundamentalism. Karachi: Dawn. Hardy, P. (1972). The Muslims of British India (p. 54). Cambridge: Cambridge University Press. Jansen, G. H. (1979). Militant Islam (p. 88). London: Pan Books. Jilani, A. (1955). Tehrike Islami, Mashriqi Pakistan mein. [The Islamic movement in East Pakistan.]; (p. 74). Tameere Insaniyat (Lahore), Vol. 1, Nos. 5–6. Karlekar, H. (2005). Bangladesh: The new Afghanistan (p. 67). New Delhi: Sage. Khan, M. Syed Qutb – John Locke of the Islamic World? In www.globalist.com/Storyld. aspx?Storyld ¼ 3324 Accessed on November 5, 2007. Mahmood, S. (1995). Islamic fundamentalism in Pakistan, Egypt and Iran (p. 104). Lahore: Vanguard. Maley, W. (1999). Fundamentalism reborn? Afghanistan and the Taliban (p. 18). London: Hurst & Company. Maududi, A. A. (n. d.). East Pakistan problems and their causes and solutions (pp. 15–16). Decca: Department of Publicity and Information, Jama’at-East Pakistan. Maududi, A. A. (1942). Musalman awr Maujuda Siyasi Kashmakash (Vol. 2, p. 76). Pathankot, Maktaba Jama’at-i-Islami. Maududi, A. A. (1951). Pardah. Lahore: Islamic Publications. Maududi, A. A. (1955a). Islamic law and constitution (p. 44). In: K. Ahmad (Trans. and Ed.). Lahore: Jama’at-i-Islami Publications. Maududi, A. A. (1955b). The message of Jama’at-i-Islami (p. 46). Lahore: Jama’at-i-Islami Publications. Metcalf, B. ‘‘Traditionalists’’ Islamic activism: Deoband, Tablighis and Talibs. www.ssrc/ sept11/essays/metcalf.htm, Accessed on 30 October 2007. Mir, A. (2006). The true face of the jihadis: Inside Pakistan’s network of terror (p. 5). New Delhi: Roli Books. Mir, S. (1970). Mawdudiyat awr Mawjuda siyasi kashmakash. [Maududism and current political crisis.]; (pp. 10–11). Lahore, Al Bayan Publications.

266

KALIM BAHADUR

Munir, M. (1979). From Jinnah to Zia (p. 49). Lahore: Vanguard. Pirzada, S. A. S. (2000). The politics of the Jamiat Ulema-i-Pakistan; 1971–1977 (p. 4). Oxford: Oxford University Press. Prasad, B. (1999). The foundation of Muslim nationhood (p. 21). New Delhi: Manohar. Roy, O. (1995). The failure of political Islam (p. 29). Cambridge: Harvard University Press. Rudad. (1967). Jamaat-i-Islami, Part V (Proceedings of the Jamaat-i-Islami) (pp. 93–95). Delhi: Jama’at Publications. Smith, W. C. (1977). Islam in modern history (p. 236). Princeton: Princeton University Press.

PART III DEVELOPMENT, TRADE AND CONFLICT

This page intentionally left blank

SOUTH ASIAN REGIONAL COUNCIL (SARC) AND SOUTH ASIAN RIVERS: A STUDY IN WATER CONFLICT Ashok Swain 1. WATER CRISIS: WINDOW OF OPPORTUNITY Water has been called the oil of the 21st century. Global water consumption is rising steeply and the lack of adequate supplies of quality water is a problem in many parts of the world. Water is one of the most abundant elements of earth, covering nearly 1,400 million cubic kilometers, nearly 70 percent of the planet’s surface. However, only a very minor portion of this huge volume is actually usable. The rest forms oceans and polar ice caps. Availability of usable water is further limited by the fact that it cannot be easily exported over long distances. Water has also become a booming business recently. Globally, the water industry’s annual revenue is estimated at 500 billion US dollars, in which the share of the United States alone is more than half. This number is expected to grow as the growing demand for water and markets begin to mature. The fastest growing market areas in water sectors are in water rights and urban water supply. The bottled water industry now enjoys a 50 billion USD market globally. The Natural Resource Defense Council of the US estimates that

Conflict and Peace in South Asia Contributions to Conflict Management, Peace Economics and Development, Volume 5, 269–283 Copyright r 2008 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1572-8323/doi:10.1016/S1572-8323(08)05017-0

269

270

ASHOK SWAIN

bottled water is 240 times to 10,000 times more expensive than water. Consumers are ready to pay almost 1 US dollar for 1 l of some brands of bottled water. The large profit margin in the bottled water industry has in some cases been able to overcome the high transfer cost. This has recently led to some water being exported from Blue Lake of Alaska to a bottling plant in the Fujian Province of China. An American company is also importing vast amounts of underground water from a fiord area of Norway to be bottled and sold in the American market. However, this long-distance bulk water transfer by tankers is still not economically viable unless the water is sold as bottled water. So, regional variation in water availability is yet to be overcome. The World Water Development Report written in 2003 jointly by multiple UN agencies, titled ‘‘Water for People, Water for Life’’ (UNESCO, 2003), predicts a global water crisis of the future due to attitude and behavior problems on the part of national leaders. This report finds the cause of this water crisis to be its mismanagement and predicts ‘‘Water resources will steadily decline because of population growth, pollution and expected climate change.’’ Water consumption has nearly doubled since 1950. This UN report again predicts that by the year 2025, water withdrawal will increase by 50 percent in developing countries and 18 percent in developed countries. According to UNESCO Director-General Koichiro Matsuura, ‘‘Water supplies are falling while the demand is dramatically growing at an unsustainable rate. Over the next 20 years, the average supply of water worldwide per person is expected to drop by a third.’’ As demand for water grows, there is much talk of looming water wars. Water tables are falling increasingly on every continent. Many countries already face serious problems in meeting rapidly increasing water demands. Today, two or more countries share 263 first-order river basins. The increasing scarcity of water and the unequal and multilateral distribution of this resource pave the way for a greater number of international river water disputes. A number of commentators believe that the dependence of many developing countries on an external water supply may force them to re-orientate their national security concerns in order to protect or preserve such availability. Several countries are currently in dispute over the sharing of their common water (Swain, 2004). A high possibility for conflict has brought global water issues into the arena of ‘‘high politics.’’ UN officials and World Bank analysts regularly proclaim that ‘‘the previous war was about oil, the next war will be about water.’’ Already in 2001, UN Secretary General Kofi Annan had predicted ‘‘fierce competition for fresh water may well become a source of conflict and wars in the future.’’ The U.S. National Intelligence Council has also

SARC and South Asian Rivers

271

reported that the possibility of interstate conflict will increase during the next 15 years ‘‘as countries press against the limits of available water.’’ However, history does not support these claims. According to Postel and Wolf (2001), ‘‘One fourth of water-related interactions during the last half century were hostile. Although the vast majority of these hostilities involved no more than verbal antagonism, rival countries went beyond name-calling on 37 recorded occasions and fired shots, blew up a dam, or undertook some other form of military action.’’ The only reported clear case of war over water was 4,500 years ago between two Mesopotamian city-states, Lagash and Umma (southern part of present Iraq). Several countries are currently in dispute over the sharing of their common rivers. In this century, water scarcity has caused a few minor skirmishes but no war has yet been fought. Wars are very rarely fought over one issue. So, establishing water as the sole incompatible factor to cause violent armed conflict between two nationstates is not so easy. If we move beyond the immediate factors contributing to the hostile actions of warring parties and examine the origin of the conflicts, then there is a greater possibility of finding the contribution of water and water-related issues in many of these cases. Water may be a factor in the armed conflicts between Israelis and Arabs, Ethiopia and Eritrea, Bangladesh and Burma. In short, the river water issues have, thus far, not been the sole or immediate reasons for violent episodes. Water not only causes conflict, it can also contribute its part to building cooperation. In several cases, competing and disputing riparian countries are now moving toward cooperation. Research in recent years has brought out few new facts about international water. There are 263 international rivers and lakes compared to the UN’s 1978 list of 214 (Wolf, Kramer, Carius, & Dabelko, 2005). These basins cover nearly 45 percent of Earth’s land surface area; 145 countries have some share in international water systems and in almost two-thirds (92 of 145) more than half of their territories come under the international basin. These days, not many are talking about ‘‘Water Wars’’ on these international rivers. Rather the discussion is more of cooperation. According to Aaron Wolf and his associates, since 1814, 157 international treaties have been signed dealing with non-navigational aspects of international water issues. They have analyzed 1,831 international waterrelated events over the last 50 years and have found out that two-thirds of these encounters were of a cooperative nature. In recent years, there are several international rivers that have come under cooperative agreements. Growing competition over the waters of the Mekong, Jordan, Zambezi, Ganges, and Mahakali rivers have resulted in cooperative sharing

272

ASHOK SWAIN

arrangements in the 1990s. In spite of serious apprehensions, the treaty of the Indus River is running relatively smoothly and the riparian countries of the Nile basin have come together to establish a Nile River Commission.

2. SUSTAINING RIVER COOPERATION AND INTERNATIONAL WATER INSTITUTIONS In most of the cases, competition over river water results in cooperation to maximize the benefits of the scarce resource to meet increasing demand. However, history shows that cooperative arrangement over water among the riparian states cannot last if the latter does not interact with and gain support from such institutions for proper water management at the basin level. Signing agreements on water sharing may be easy, but the real problem is how to keep the agreement working. Agreements need to stand the test of time. An agreement can positively contribute to peace and cooperation in the basin by addressing the future water needs of the riparian countries. Thus, it is not only that we need agreements on international water systems; we also need the water regimes to be sustainable, lasting, and progressive. For the appropriate and competent management of shared freshwater systems, it is vital to build upon institutions at the basin level. Some of the international organization and legal principles are aiming at providing guidelines for the basin-based arrangements to emerge. There have been several attempts to establish and strengthen international organizations and to create an international legal framework for the management of international freshwater resources. The World Water Council (WWC) and the Global Water Partnership (GWP) are two major international ‘‘water institutions’’ that have been established in the 1990s. While the WWC is essentially a forum for discussion, the GWP comprises organizations with financial powers to implement various programs. There have also been numerous individual attempts, for instance, by the Global Environmental Facility (GEF), World Bank, UNDP, UNEP, Food and Agricultural Organization (FAO), and World Meteorological Organization/ United Nations Educational, Scientific, and Cultural Organization (WMO/ UNESCO) to find ways of successfully sharing the international watercourses among states. Besides providing institutional support for the fresh waterresource management, there is an ongoing move toward establishing a common legal framework for the sharing of international watercourses at the global level.

SARC and South Asian Rivers

273

The International Law Association (ILA) and International Law Commission (ILC) have made several attempts since 1956 to establish a universal framework for the sharing of international river waters. After decades of deliberations, the ILC submitted its draft in 1996 for consideration by the UN General Assembly. Finally, the Convention on the Law of the Non-Navigational Uses of International Watercourses, adopted by the United Nations General Assembly on May 21, 1997, was submitted to the member states for their ratification. However, this Convention to be legally binding needs to be signed and ratified by 35 countries. This ratification process is moving along at a very slow pace, which has raised the fear that the Convention may not be ratified by enough countries to enter into force. Many governments are finding it either too strong or too weak, with positions often coinciding with whether the nation is upstream (too strong) or downstream (too weak) in international basins. Articles 20–23 of this Convention deal with quality issues involving the sharing of international river water. However, the real challenge is the contradiction between article 5 and article 7 of the Convention. The problem of defining the ‘‘equitable use’’ and its conflict with the ‘‘no-harm principle’’ is bound to arise. The idea of equitable apportionment is the sharing of the water of international rivers by states on an equitable basis. The underlying postulate of equitable apportionment is equitability and not equality. The idea is the maximum benefit accruing to all the riparian countries, keeping in mind their economic and social needs. What is equitable distribution, however, is a difficult question. The reasonable share or equitable use, expresses respect for a riparian state’s sovereign right within its territory, but restricts its uses to ensure reasonable shares for the other riparian states. This theory gives the choice of use to non-involved third parties. In most of the cases, however, it is less attractive to upstream riparian countries than to downstream countries. Under the doctrine of prior appropriation, water rights go to the first user in time: ‘‘first in time, first in right.’’ It is being increasingly applied to international river basins and has been widely applied in the Western USA. More powerful and rich countries in river basins use this doctrine to deny new uses to co-riparian states on the grounds that they will affect the existing uses. This principle is in general attractive to the upstream countries. Thus, even if this Convention is ratified by member states and becomes a legal framework, it will not be sufficient to address the problem of water sharing in different parts of the world. The sharing of international freshwaters among the riparian countries in different geographical regions is a problem of huge magnitude. In the presence of strong regional variance

274

ASHOK SWAIN

over the availability, need, and perception of the fresh water, establishing an internationally acceptable legal principle may not itself bring the solution. Water is irreplaceable. Thus, the problem of its reduced quantity is difficult to solve. The quantity factor contributes to destroying existing cooperative arrangements and leads the parties to take conflicting positions. The quantity issue can most easily be formulated in a zero-sum game: what country X gets is denied to country Y; whereas issues of quality are something all may gain from and control is something that can be shared more easily. The agreements on the water quality issue regarding the Colorado River and the Rhine River are some of these examples. Degradation of water quality is becoming an increasing problem all over the world. Degrading water quality is found as a consequence of sectoral use of water. Water used for food production or for forestry gets contaminated or polluted by fertilizers or pesticides. Water salinity may increase due to mismanagement of irrigation schemes. Untreated sewage water coming out of domestic sources or industry is another source of degraded water quality. From a management point of view, it is important to note that there are also close linkages between decreasing water quality and water quantity. A high degree of polluting effluents entering a water body is resulting in a decreasing amount of water of an acceptable quality. If an increasing amount of water is withdrawn from a water resource, a decreasing amount of good quality water will remain. Linkages between water quantity and water quality are of importance not only from a human and an ecosystem health perspective but also from an economic perspective. Managing water quantity and water quality together and in an integrated way is therefore an imperative for sustained land and water productivity, ecosystem maintenance, and sustained economic development. International agencies should thus support the application of an integrated management of water quantity and quality for sustained water security, particularly in an international river basin. The large-scale industrial use of water gives birth to severe problems of water quality. Water quality has already become one of the major environmental issues in many of the industrialized countries. In Sweden, industrial water use quintupled between 1930 and 1965, but since then it has shown a marked decline. Strict environmental protection requirements for the pulp and paper industries, which account for about 80 percent of the country’s industrial water withdrawal, fostered widespread adoption of recycling technology. Despite more than a doubling of production between the early 1960s and late 1970s, the industry sector cut its total water use by half – a fourfold increase in water efficiency. Resources and technology can easily make a

SARC and South Asian Rivers

275

difference to address water quality problems. David G. LeMarquand’s book International Rivers: The Politics of Cooperation (1977) is a significant work on the political basis of sharing internationally owned rivers. He suggests that when water quality is an issue, the use of similar industrial production technologies facilitates the scope for successful agreements concerning international rivers.

3. DESIGNING GLOBALLY, MANAGING REGIONALLY Complex water disputes can be solved only by cooperation and compromise, not by a strict insistence on rules of law. For a fruitful and long-lasting cooperation on shared waters, there is a need for a comprehensive approach to address the water scarcity issue. This comprehensive approach includes a series of measures to be taken at the basin level. The basin-based measures include: (1) treating the river system as a single unit, (2) involvement of both state and non-state actors in water management, (3) recognition of social and cultural context in water use, (4) clear appropriation rules in water sharing, and (5) information-sharing networks among the riparian countries. These basin-based initiatives have to be supported by the measures taken at the nation-state level: (1) effective management of ‘‘virtual’’ water (trading of water intensive commodities) and (2) fair water pricing. There is no harm in obtaining a common agreement among nation-states over the sharing of international rivers; rather it may help to diffuse the conflicts at a certain level. However, it needs to be emphasized that a universal legal framework may not be able to efficiently handle the specific problems arising out of sharing disagreement over international rivers in various regions of the world. The hydropolitics of an international river basin are closely related to that region’s geo-strategic thinking. Every river basin has its own long history of water use and sharing – consistent with regional culture and tradition. The riparian states have their own clearly shared social and economic interdependencies. Thus, the water-sharing issues over an international river need to be addressed seriously in a regional framework. The existing regional organizations in different parts of the world may be encouraged to strengthen their institutional mechanisms to deal with common water problems. The water management institutions, besides providing reliable mechanisms for long-term visions, need to be flexible to react to short-term

276

ASHOK SWAIN

occurrences. Regional bodies can be potentially more flexible in responding to the water flow fluctuations in their trans-boundary rivers than an international outfit. These organizations may also inherently be capable of handling the peculiar attributes involved with the river water sharing in their own respective regions. Building institutions to facilitate sharing of the fresh water resource in the regional framework may take time. The ongoing sharing of hydrological, meteorological, and other relevant kinds of data and information among the regional members may build the grounds for establishing joint institutional mechanisms. Regional agreements on allocation and sharing are not absolute, as they continue to evolve after the establishment of initial cooperative institutions. These institutions, however, can provide a secure context for negotiation (Priscoli, 1994). The European Union (EU) has led the way among regional organizations in managing its regional water. The EU, with its range of directives on water management and protection, is working toward sustainable management of European water. The EU Water Framework Directive (EUWFD) of 2000 has adopted the principle of looking at water in a holistic way, where the resources are linked to the uses, the terrestrial environment, the aquatic environment, and finally to development and human health. It is part of the ‘‘acquis communautaire’’ that applicant countries need to implement. Since 1986, the cooperation in the Rhine basin has been a success story, thanks to the combination of political motivation and a realistic target. In the Danube basin, cooperation is limited, but some positive changes have been witnessed recently after the application of some riparian countries to join the EU. The EUWFD emphasizes the following: (1) water management based on river basins: the best model to manage the river water is according to the natural geographical and hydrological unit, instead of according to administrative or political boundaries; (2) protection of all waters (aquatic ecology, unique and valuable habitats, drinking water sources, and bathing water) by a set deadline; (3) coordinating a number of measures taken at the community level to address a particular pollution problem; (4) a combined approach of emission limit, values, and quality standards; (5) public participation is crucial to keep waters clean: it helps to balance the interest of various stakeholders and facilitates enforceability; (6) the EU Water Framework Directive of 2000 repealed seven old directives on exchange of information on fresh water quality, the fish-water, the shellfish water, and ground water, etc.; (7) getting the price right: adequate water pricing to act as an incentive for the sustainable use of water resources. The EUWFD is a good document but the specific actions to achieve ‘‘good status’’ are the responsibility of the competent authorities at all

SARC and South Asian Rivers

277

levels. The implementation of this Directive poses various challenges. However, taking over 10 years to develop, the new EUWFD is the most significant legal instrument in the water field to emerge from Brussels for some time and will have a profound effect on how water is managed in Europe. NAFTA in North America has the economic potential to follow the path of the EU in managing their respective shared fresh water resources. The expensive nature of the EU directives, however, brings apprehension for their implementation by the regional outfits of the developing countries. But at the same time, it also shows that a regional organization can effectively manage and develop the shared fresh water resources in its own region. In the South, the Southern African Development Community (SADC) has been the first regional organization to take up this challenge seriously, at least in formulating rules and directives for regional water management.

4. RIVERS OF SOUTH ASIA The South Asian region has been under considerable pressure from a growing population and the absence of carefully crafted sustainable development strategies. This region is home to nearly 1.4 billion people and nearly half of them depend on the large river systems. Several of these river systems flow across national boundaries and have been the source of interstate conflicts. River sharing in the South Asian region has caused frequent conflicts between India and Pakistan, India and Bangladesh, and India and Nepal. There are two major river systems in the region, the Indus and Ganges-Brahmaputra basins. While the Indus basin is shared by India and Pakistan, the other is shared by India, Nepal, Bhutan, Bangladesh, and also by China. There are some bilateral agreements over the water sharing of international rivers in the region. Notable ones are: the Indus Treaty between India and Pakistan in 1960, the Ganges Treaty between India and Bangladesh in 1996, the Sarada Agreement in 1920, the Kosi Agreement in 1954, the Gandak Agreement in 1959, the Mahakali Treaty in 1996 between India and Nepal, and similarly a series of hydropower generation agreements between India and Bhutan. India and Pakistan signed an agreement to divide the Indus river system between themselves in 1960. The World Bank brokered this landmark water dispute resolution. The dispute had originated with partition of the Indian sub-continent in 1947 as the upstream of the Indus basin remained in India, bringing Pakistan under Indian control over the main supply of water for its

278

ASHOK SWAIN

agricultural lands. These two new states failed to agree on how to share water and manage the irrigation network. The intervention of the World Bank as mediator brought India and Pakistan to the negotiating table. However, it took nine long years for the World Bank to bring both the riparian countries into agreement. The Treaty was signed on September 19, 1960, in which the two countries agreed to the following settlement: the partition of Indus Basin waters by allocating the three Eastern Rivers – the Ravi, Beas, and Sutlej – to India and the three Western Rivers – the Indus, Jhelum, and Chenab – to Pakistan. This agreement has certainly survived two and half wars and has provided an ongoing mechanism for consultation and conflict resolution through inspections, exchange of data, and annual meeting. However, there have been some disputes over a few projects on the Western Rivers between India and Pakistan. One of them is the issue of the Baglihar hydroelectric dam on the Chenab River, which has recently been referred to the World Bank for settlement. The most bitter and protracted river disagreement has been between Bangladesh and India over the sharing of the flow of the Ganges. This disagreement even goes back to the time when Bangladesh was part of Pakistan and India started constructing the Farakka Barrage in the 1960s. This dispute has sometimes been temporarily addressed by interim agreements, but in the first half of the 1990s it erupted into an internationally publicized disagreement. In December 1996, the breakthrough came after years of political stalemate and bitter rhetoric at the public level, alongside quiet acts behind the scenes by water professionals, politicians, and academics on both sides at the non-governmental level. The result was the 30-year Ganges river water-sharing agreement between India and Bangladesh. The Treaty stipulates that below a certain flow rate, India and Bangladesh each will share half of the water. Above a certain limit, Bangladesh is guaranteed a minimum level and if the water flow increases to a given limit India will receive a stipulated amount, and the balance will be given to Bangladesh, which will be more than the 50 percent of the flow. The 1996 Ganges River Water-Sharing Agreement has certainly helped the bilateral relationship between India and Bangladesh to take a turn for the better. However, both the countries have 54 common rivers and several water-sharing disputes are yet to be resolved. India and Nepal, though, have relatively good bilateral relations; both have had many rounds of occasional tense negotiations relating to hydroelectricity generation, irrigation water, and flood control. Several early agreements about shared projects have been controversial in Nepal. The water sharing of the major rivers originating in Nepal and flowing into

SARC and South Asian Rivers

279

India has strained the relationship between the two countries. The Nepalese feel that they have not been treated equitably under the various waterresource development agreements with India, including Sarada, Kosi, and Gandak (Upreti, 1993). Negotiations regarding projects on the shared river systems have been dominated by controversies due to a lack of mutual trust (Salman & Uprety, 1999). The recent serious dispute over the river water issue came up in the early 1990s. In December 1991, both countries signed a Memorandum of Understanding to construct a barrage at Tanakpur for which Nepal agreed to provide 2.9 hectares of land. Nepalese rivers have tremendous potential for hydropower generation. However, this issue became extremely controversial in Nepal due to the internal political situation, which created bilateral tension. After several rounds of negotiations, the Prime Ministers of India and Nepal signed the Mahakali Treaty in February 1996. This Treaty on the integrated development of the Mahakali River came up as a solution to the legacy of disagreement between Nepal and India over the Tanakpur Barrage project. The Treaty, by enlarging its scope, brought three separate water-resource projects under its ambit. In addition to validating the Tanakpur MOU, the agreement took under its wing the regime established by the Sarada Treaty and also paved the way for the construction of the Pancheshwar Multipurpose project. However, Nepal lacks the capital and technology required for such large projects and also needs a buyer for the surplus hydropower. Due to various factors, India is the only country that could provide assistance. Thus, India’s direct involvement in the utilization of the river water in Nepal is crucial and that contributes to regular controversies. India’s relations with Bhutan are much smoother. This is reflected in several hydropower development agreements signed by the two countries. A few notable ones are the Kurichhu Hydroelectric Project on Kurichhu River and the Chukha Hydroelectric project on Wangchu River. In the 1990s, India and Bhutan agreed to construct the Tala Hydroelectric Project, a run-of-the-river 1020 MW project on the Wangchu River, downstream of the Chukha Hydroelectric project. This project is being funded by India as in previous cases, but most importantly it establishes a process for sharing the benefits of development, this time through market prices rather than a fixed rate of payment. One central part of the deal, the price Bhutan receives for electricity generated, was not pre-determined but left for the market to decide. As Umesh Parajuli of Nepal describes, while the Indus Treaty of 1960 is essentially a river-sharing agreement, the Ganges Treaty of 1996 is a watersharing agreement and the Mahakali Treaty of 1996 is a benefit-sharing

280

ASHOK SWAIN

agreement. Most of the international river water agreements in South Asia are not comprehensive in nature. Despite huge water resources available in the region, the inability among and between countries of the region to reach mutually beneficial comprehensive agreements could invite more conflicts in the days ahead. The way, in which rivers are used in one country, can indeed have far-reaching effects on nations downstream. India’s proposal to link major rivers in the region to provide water to its arid provinces is causing anxiety among its neighbors, particularly Bangladesh and Nepal. The project plans to connect 30 major rivers and would involve diverting the Ganges and the Brahmaputra. This massive proposal, if it gets implemented, requires the construction of large dams within India, Nepal, and Bhutan. The linking of the major rivers of the region could create more disputes instead of resolving the existing ones. The project requires India to enter into agreements with Nepal, Bhutan, and Bangladesh, as these three countries share the Ganges-Brahmaputra basin. If India decides to go ahead with the river linking projects, many more conflicts regarding water sharing is bound to crop up in South Asia. In South Asia, the failure of governments to find negotiated settlements over water in the past has contributed to the rise of tensions between states. Beside the Indus case, the South Asian states have always adhered to the strict practice of bilateral negotiation. This bilateralism enhances the importance of past disagreements and suffers from a perception that limits the needs of neighboring states. Individual states in the region have always preferred the grandiose river development scheme within the state-centric approach. Moreover river water-sharing issues in most cases have been negotiated in isolation and that has failed to link other issues for a better and successful negotiated outcome.

5. SAARC AND THE SOUTH ASIAN RIVERS Regional cooperation has not been easy to come by in South Asia. There have been several armed conflicts between India and Pakistan, clashes on the Indo-Bangladesh border and accusations about India’s domination in the region. The formation of the South Asian Association for Regional Cooperation (SAARC) in December 1985 was regarded as a major diplomatic breakthrough in South Asia. When SAARC was established to provide a forum for discussion and negotiation primarily on trade and development, contentious topics like water-resource negotiations were totally excluded from its agenda. More than two decades have passed since

SARC and South Asian Rivers

281

the first Summit; it is time for a new beginning for the entire region. Over these last two decades, several factors have contributed to substantive areas of cooperation among the seven countries. The improvement of the relationship between two major South Asian countries, India and Pakistan, in recent years has provided SAARC an opportunity to move itself to a different pedestal. SAARC may not be as successful as its neighbor ASEAN, but its existence has certainly provided a forum for the policy makers and experts to meet regularly and hold informal discussions on important bilateral and regional issues in South Asia. With the help of following practices of informalism and behind-the-scenes discussions, SAARC has contributed to a confidence-building process in the region. Its success in getting an agreement to create a SAARC Free Trade Area (SAFTA) has certainly helped to promote regional economic cooperation. In this paper, the aim is to explore the ways and means through which SAARC may play the role of an effective mediator in interstate river water disputes in the region and provide support for the existing agreements in order to make them long-lasting and comprehensive in character. As the competition over trans-boundary water resources to satisfy growing needs intensifies in South Asia, international river basins demand increasing attention. In many parts of the world, third parties are being asked to play important roles in facilitating and supporting negotiations and helping to develop and sustain bilateral and multilateral agreements aimed at cooperative development and sharing of water across international borders. However as we have noticed, except in the Indus case, South Asian riparian countries are averse to seek the mediatory help from outside. In this scenario, SAARC can possibly play a very significant role, having a sophisticated and context-sensitive understanding of hydropolitics in the region, to tackle the water management challenges that lie ahead in this highly complex arena of regional interactions. Being a regional body, SAARC can find acceptability by the riparian states, those who are opposed to involving any outsider in bilateral water negotiation. Third party intervention and assistance, in many cases, facilitate the negotiation of interstate river water agreements. Where riparian countries have been able to establish cooperative arrangements, successful and sustainable development programs follow. The establishment of cooperative arrangements on shared river systems also brings further international collaboration and external assistance. Due to resource constraints, riparian countries of South Asian rivers have become increasingly aware of the costs of not cooperating. Water scarcity and a lack of financial resources may gradually encourage the riparian countries to cooperate in order to achieve

282

ASHOK SWAIN

optimal benefits. The change in attitudes of international financial institutions and bilateral aid programs has provided incentives for basinbased cooperation. Many development agencies are already concerned with increasing water scarcity and have developed water resource strategies for foreign assistance. The financial benefits are being used as incentives for riparian states to come together (Priscoli, 1994). SAARC may use this opportunity and carve a role for itself to promote basin-based institutional arrangement on shared rivers in the region. Helping to bring together disputing riparian countries of shared river systems, SAARC can use water resources as the cornerstone of regional cooperation instead of being a source of fierce conflict. There are several ways SAARC could help to prevent conflict and promote cooperation among the riparian states of the region’s shared rivers. The regional organization can especially play the role of facilitator of water-resource-sharing agreements. Riparian countries in the region are often unable to establish institutional cooperative arrangements because of their concern over existing and future water rights. Mutual suspicion and uncertainties of reciprocal action tend to obstruct constructive engagement. To overcome such obstacles, SAARC can provide credible and impartial assistance in order to launch the process of cooperation. Gradually, this assistance will facilitate mutual trust and confidence among the basin riparian states in order to achieve collective action. Formation of River Basin Organization (RBO) may be actively encouraged and supported by SAARC to promote sustainable river water cooperation, and also larger benefit sharing. Basin-based development of irrigation, hydropower, water diversion, or flood control projects can provide South Asian countries with greater net benefits than what they could have achieved through purely state-centric development. A strong and independent RBO is necessary to stipulate a set of clear rules and regulatory measures in the basin regarding water rights and environmental obligation. Moreover, in several cases riparian countries in South Asia have unequal access to river flow data. This asymmetric information can sometimes be scientific or strategic. SAARC, by providing resource support to RBOs can help to maintain a functional information-sharing framework, which can facilitate the smooth running of a river basin management regime. Lack of resources usually affects the effectiveness of an RBO. Besides technical and material support, SAARC can help to set up a regional training center for RBO staff and personnel. Finally, SAARC might attempt to establish a common framework for the sharing of international watercourses at the regional level. Moreover, there

283

SARC and South Asian Rivers

is a distinct possibility of disputes arising while defining and interpreting bilateral water agreements as well as international and regional water laws and conventions. SAARC may promote the idea of establishing a Regional Water Tribunal. A tribunal like this will not only help to address the existing inconsistencies associated with water-sharing norms and doctrines, but it will also prevent individual basin states from going out of the basin-based framework and from taking advantage of their superior military or hydrological situation.

REFERENCES LeMarquand, D. G. (1977). International rivers: The politics of cooperation. Vancouver, BC: University of British Columbia and the Waterloo Research Centre. Postel, S. L. & Wolf, A. T. (2001). Dehydrating conflict. Foreign Policy, (September/October), 2–9. Priscoli, J. D. (1994). Conflict resolution, collaboration and management in international and regional water resources issues. Paper Delivered at the VIIIth Congress of the International Water Resources Association (IWRA), Cairo, Egypt, November. Salman, M. A., & Uprety, K. (1999). Hydro-politics in South Asia: A comparative analysis of the Mahakali and the Ganges Treaties. Natural Resources Journal, 39(2), 295–343. Swain, A. (2004). Managing water conflict: Asia, Africa and the Middle East. London: Routledge. UNESCO. (2003). Water for people, Water for Life. Paris. Upreti, B. C. (1993). Politics of Himalayan river waters: An analysis of the River Water Issues of Nepal, India and Bangladesh. Jaipur: Nirala. Wolf, A. T., Kramer, A., Carius, A., & Dabelko, G. D. (2005, June). Global security brief No. 5: Water can be a pathway to peace, not war, Washington DC: Worldwatch Institute.

This page intentionally left blank

INDIA’S TRADE WITH ITS SOUTH ASIAN NEIGHBOURS: CONFLICT OR CONFIDENCE BUILDING? Indra Nath Mukherji 1. INTRODUCTION In the literature on political economy, trade is beneficial to both the parties exchanging a product. Different countries trade with one another on the basis of comparative advantage and diverse factor endowments. It is possible for a more developed country to be more productive in all lines of production in relation to another less developed country, but so long as comparative difference in cost exists, it would be worthwhile for each to specialise in those products in which they have comparative cost advantage. We may illustrate this by means of the following hypothetical illustration. Let us assume that for equal application of factors of production at any point of time the value of production in respect to chemicals and ceramics by Bangladesh and India is given below:

Bangladesh India

Chemicals

Ceramics

Domestic ratio of exchange

10 20

30 40

1:3 1:2

Conflict and Peace in South Asia Contributions to Conflict Management, Peace Economics and Development, Volume 5, 285–298 Copyright r 2008 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1572-8323/doi:10.1016/S1572-8323(08)05018-2

285

286

INDRA NATH MUKHERJI

In the above example, India is more productive in both, chemicals as well as ceramics. However, while Bangladesh is thrice as productive domestically in respect to ceramics as compared to chemicals, India is only twice as productive in the same product relative to chemicals. It will be worthwhile for Bangladesh to specialise in the production of ceramics in which it has a comparative advantage and for India to specialise in the production of chemicals. Both countries stand to gain through trade provided that for each unit of chemical Bangladesh imports from India it has to part with less than three units of ceramics to India, while India, too, gains if for each unit of chemical it sells Bangladesh it can get more than two units of ceramics. Thus, when trade takes place, it benefits both parties when the ratio of exchange for each unit of chemicals varies between W2 and o3 units of ceramics. The exact rate of exchange would depend on relative bargaining power of the traders. A value nearer to 3 will indicate larger bargaining power for the Indian exporter, and a value nearer to 2 would indicate greater bargaining power for the Bangladeshi exporter. In general, if the relative gains are higher the lower the elasticity of demand for the product and the greater the value addition to the product. Thus, manufactured products generally fetch better exchange as compared to primary products. Hence, quite often it is low relative gain that gets translated to ‘unequal exchange’ and results in disenchantment with trade. Sometimes the gains from increased volume of exports are reduced, or more than offset, by losses resulting from falling export prices as more are exported resulting in ‘immizerising trade’. The nexus between trade liberalisation and poverty reduction has been subject to debate. Trade liberalisation is accepted widely as a positive contributor to poverty reduction, although the linkages between trade and poverty are not as direct as the linkages between poverty and various national social welfare programmes. Trade contributes to growth, and through growth to better income, and employment opportunities. Theoretically, trade liberalisation results in productivity growth through increased competition, efficiency, innovation, and acquisition of new technology. Economic growth in turn, is a key to sustain poverty reduction. Since the effects of trade liberalisation are likely to be felt unevenly across sectors and geographical regions, the role and nature of governmental intervention and complementary policies is more relevant in a globalising world than ever before. Trade liberalisation that leads to opening markets for poor country products, including agricultural products, textiles, gems and jewellery, handicrafts, etc., would be an important means to enhancing the livelihood of people in these countries and also achieving various socioeconomic goals.

India’s Trade with its South Asian Neighbours

287

2. INDIA’S TRADE WITH SOUTH ASIAN COUNTRIES: AN OVERVIEW Table A1 clearly reveals India’s growing trade with its South Asian neighbours. It further reveals that the growing trade mainly is reflecting India’s increasing exports to the region with its imports rising only modestly. Increasing the share of South Asia in India’s global exports reflects the increasing importance of South Asia as a market for India. In contrast, India’s imports from this region have not exceeded 1% of its global imports. This has led to an increasing trade imbalance of India with its neighbouring countries. During 2002–2004, its exports were five to six times its imports. Table A2 reveals that in 2004–2005 India’s largest market in South Asia was Bangladesh followed by Sri Lanka, Nepal, and Pakistan. Over the period 1996–1997 to 2004–2005, while the share of Bangladesh in India’s exports has fallen, those of Nepal, Pakistan, and Sri Lanka have increased. With regard to imports, in 2004–2005 while the share of Sri Lanka increased considerably the shares of most other South Asian countries have declined. Thus both the export and import shares of Sri Lanka improved during this period.

3. INDIA’S TRADE WITH BANGLADESH: DOMINANCE-DEPENDENCE SYNDROME 3.1. Trade Imbalance Issue It may be noticed in Table A1 that India’s trade imbalance with Bangladesh as reflected in export–import ratio is the highest in the region (excluding the Maldives) and much higher than the average ratio for the region as a whole. Since 1999–2000, this ratio has been increasing progressively. The trade imbalance issue comes to the forefront when bilateral discussions take place between the two countries, both at the official as well as the business, or other nongovernmental level. It is also quite often stated that the actual level of Bangladesh’s trade deficit with India would be further accentuated if we factor in the unofficial (illegal cross border) trade with India. Estimates of the level of unofficial trade vary. For example, Bakht (1996) has estimated that in FY 1994 the illegal imports to Bangladesh were 1.5 times higher than legal imports. In contrast, illegal

288

INDRA NATH MUKHERJI

exports constituted only USD 126 million over the same period. Thus, against a legal deficit of USD 392 million, the illegal trade deficit stood at USD 498 million.1 Another study by Chaudhury (1995) estimates cross border trade with India to be about USD 360 million in FY 1994, which is roughly equivalent to official imports to Bangladesh in the corresponding period. Unofficial exports from Bangladesh were confined to a small band of commodities, particularly synthetic fabrics and spices.2 If both official and unofficial trade with India is included, then in recent years the imports from India constituted roughly 25% of the country’s total imports, while imports by India from Bangladesh constituted an average of 0.5% of her global imports, reflecting ‘deepening import dependence on India in recent times.’3 A closer scrutiny of Bangladesh’s trade imbalance with India however reflects a different picture. It is well understood in economic theory that any country should seek to balance its trade and payments globally and not bilaterally. To illustrate this point, Bangladesh’s trade figures for 2001–2002 reveal that this country had a trade imbalance with China to the extent of USD 822 million and, on the other hand, a trade surplus of USD 1.9 billion with the US. Yet, this issue has not been raised by Bangladesh with China, nor would Bangladesh relish if the US were to urge Bangladesh to take measures to balance its trade with the former. The US is one of Bangladesh’s principal markets for its growing garment industry. Without access to India’s cheap fabric and yarn as raw material; it would have been even more difficult for Bangladesh to compete with other countries in the US market. India’s exports to Bangladesh in 2002–2003 reveals that food and vegetable products accounted for a quarter of India’s exports to that country. Next in importance were textile and textile products, followed by base materials and articles thereof. Thus, the bulk of India’s exports to Bangladesh related to either food security or to the requirements for raw materials to support the country’s export and industrialisation requirements. The above-mentioned trends indicate that Bangladesh needs to source from India in view of the latter’s competitive capability to supply the former (Mukherji, 2004).

3.2. Tariff and Nontariff Barriers Another bone of contention in Indo-Bangladesh trade is the alleged imposition of high tariff and nontariff barriers on India’s imports from Bangladesh. It is stated that the growing trade imbalance between the two countries is a sequel to this.

India’s Trade with its South Asian Neighbours

289

It has been stated quite frequently by Bangladesh that the latter initiated a programme of tariff liberalisation relatively early, in the mid-1980s; the phasing, sequencing and pacing of the reforms have been much more radical than that of India. The argument advanced by Bangladesh is flawed however, since it does not explain how Most Favoured Nation (MFN) tariff liberalisation by Bangladesh enabled only India to make deeper penetration to the Bangladeshi market and not its other competitors who have benefited similarly. Further, in recent years, particularly, since mid-1990s India had been liberalising its import regime at a faster pace than that of Bangladesh and currently India’s tariff rates are in fact more favourable than that of Bangladesh. And yet the trade imbalance with Bangladesh continues to increase. The prime reason is the improving competitiveness of India’s supply to the Bangladeshi market and the inability of Bangladesh to supply the needs of India’s market from the latter’s restricted export basket. Apart from tariff barriers, Bangladesh has listed a number of nontariff barriers facing their exporters. Bangladesh has been raising the question of mandatory testing of food items, textiles, and leather. In most cases, testing facilities are not available near the border, and as such the samples have to be sent to places far away for testing. Presently for example, textile samples are being sent to Lucknow for testing, which is time consuming. In the case of leather, the consignments are exported to Chennai for testing. Bangladesh has requested that their own laboratories be authorised to screen the products. Negotiations on mutual recognition of each other’s laboratories are continuing. The Bangladesh authorities also expressed concern regarding special labelling requirements by India in respect to jute bags and quarantine requirements for raw jute. The Indian exporters also have expressed concerns on the continuing restriction on the import of Indian yarn through land route. Indian exporters have expressed concern over restriction on the import of certain commodities such as sugar, milk powder, etc. through land customs stations. Thus, both Bangladeshi as well as Indian traders have expressed resentment on a number of nontariff barriers affecting their exports.4

4. INDIA’S TRADE WITH BHUTAN: TRADE IMBALANCE IS NOT AN ISSUE India’s trade with Bhutan has been more balanced than that with Bangladesh. Bhutan in fact had a trade surplus with India during some

290

INDRA NATH MUKHERJI

years. One of the primary reasons for the balanced trade between the two countries has been the ability of Bhutan to sell its surplus hydropower to India. The development of hydropower in Bhutan has been facilitated by Indian investment in that country. With increasing development of imports, Bhutan’s trade deficit with India has emerged only in recent years. IndoBhutan bilateral trade is free from barriers under their bilateral free trade agreement. This has not posed any threat to either of them.

5. INDIA’S TRADE WITH NEPAL: GUJRAL DOCTRINE TESTED The Treaties on Trade, Transit, and ‘Agreement on Cooperation to Control Unauthorised Trade’ have regulated India’s trade with Nepal. The bilateral trade is partially free with India unilaterally providing nonreciprocal duty-free imports from Nepal. Nepal however reciprocates partially by providing 10–20% tariff preference on its imports from India. The regulatory framework has undergone substantial changes since it was signed in 1950. The most significant development in Indo-Nepal trade relations was the incorporation of a new Part V in the Treaty of Transit and Trade with Nepal (1991) under Protocol to the Treaty on the basis of letters of exchange between HMG of Nepal and the government of India on 3 December 1996. Under this amendment, the government of India was to provide access to the Indian market free of customs duties and quantitative restrictions of all articles manufactured in Nepal on the basis of a certificate of origin to be issued by the agency designated by HMG of Nepal. It is important to note here that no quantitative level of minimum raw material labour content or value addition norm had been prescribed (unlike the 1991 Treaty that stipulated 50% value addition on raw material labour component). This led to a quantum jump in Nepalese exports to India, more than doubling between 1998–1999 and 2001–2002, taking advantage of relatively higher tariff barriers in India, currency depreciation led price decline in the exports of South-East Asian countries, and free access to the Indian market of manufactured products. Under the India Nepal Trade Treaty of 1996, the Nepalese traders resorted to a huge import of vanaspati/palm oil from Malaysia and redirected them to India. The adverse impact on the Indian vegetable ghee manufacturers was conspicuous. Other products such as acrylic and other synthetic yarn, plastics, and

India’s Trade with its South Asian Neighbours

291

articles thereof, copper articles, zinc oxide, etc. found increasing penetration of the Indian market. In response to the adverse impact of the aforementioned surge in imports, particularly on small and medium manufactures in some states but particularly in north and eastern India, the Treaty of Trade of 1996 was modified. A Protocol to the Treaty as modified on 2 March 2002 made changes to Article V of the previous treaty by reintroducing the Rules of Origin. The above developments show that overtures to a neighbouring country for confidence-building may not work when loopholes to such measures are available for exploitation by unscrupulous elements to the determent of the country’s national interest. It was realised that the principle of nonreciprocity has a limit, and once this principle is stretched beyond this limit, affected stakeholders put pressure on their government to retract from their excessive overtures.

6. INDIA’S TRADE WITH PAKISTAN: TRADE DISCRIMINATED Bilateral trade between India and Pakistan has been quite modest and only a minuscule part of the global trade. Their total bilateral trade was only USD 855 million in 2004–2005, India’s exports being USD 509 million and imports USD 345 million. It is remarkable however that the growth in their bilateral trade has been quite rapid since the last two years, having increased from USD 487 million in 2002–2003, an increase of 75% in two years! Before partition and immediately after independence, India was Pakistan’s most important trading partner. In 1948–1949, 56% of Pakistan’s total exports were directed to the Indian market, and 32% of its imports came from India. Lahore and Amritsar were important economic hubs, as trade flourished with a free flow of goods and services. However by the early 1950s, trade between the two countries was reduced to a trickle, which has not revived since (FICCI, p. 8). India in principle granted MFN treatment to Pakistan in 1995–1996 and has no list of permitted/banned products; whereas, Pakistan has not extended normal GATT/WTO rights or the MFN principle to India, but maintains a ‘permissible list of items that may be legally imported from India’. This discrimination by Pakistan on India’s imports has been a long-standing bone of contention between the two countries. This also has restricted the possible exchange of concessions under South Asian Preferential Trading Arrangement (SAPTA) and would

292

INDRA NATH MUKHERJI

continue to be an anomaly in the subsequent operation of the South Asian Free Trade Agreement (SAFTA) launched on 1 January, 2006. It has lead to the lack of flexibility in the exchange of concessions, particularly between India and Sri Lanka and between Pakistan and Sri Lanka. This induced bilateralism in place of regionalism and resulted in both India and Pakistan signing a bilateral free trade agreement between them (Mukherji, 2005b). An analysis of permissible items of trade by Pakistan shows that most of them are chemicals, minerals, and metal products. Finished products are not generally permitted. These include two-wheelers, cars, white goods, consumer durables, drugs and pharmaceuticals, diesel engines, cement, etc. (FICCI, ibid., p. 9). Among permissible products, some are subject to high tariffs such as tea and cardamom while others are subject to nontariff barriers such as bidi wrapper leaves, ginger, and synthetic organic colouring agents. This has resulted in smuggling and third country deflection of Indian products for the Pakistani market. This includes goods such as chemicals, industrial machinery, cement, tyres, tea, medicines, videotapes and viscose fibre. Legalising trade that now moves through third markets would cut transport costs and transit time for goods, resulting in lower price for consumers. Bringing smuggling into official channels also would help Pakistan to augment its revenues, which it urgently needs for its development (FICCI, ibid., p. 10). It is clear that political factors have stood in the way of expanded bilateral trade between India and Pakistan. Now with improving bilateral links between the two countries and SAFTA having been launched, Pakistan would ultimately reconcile granting MFN status to India more likely indirectly by gradually expanding its list of permissible items importable from India.

7. INDIA SRI LANKA TRADE: A WINDOW OF OPPORTUNITY FROM A LARGE NEIGHBOUR Given the slow progress of SAPTA, India and Sri Lanka entered into a bilateral free trade agreement known as the Indo-Lanka Free Trade Agreement (ILFTA) on 28 December 1998. The Agreement came into force in March 2000. Since the two countries differed significantly in terms of size, population, and national income, serious apprehensions were expressed on both the sides as to the rationale and feasibility of such an agreement. Under such

India’s Trade with its South Asian Neighbours

293

asymmetric power configuration it was natural for Sri Lanka to seek cooperation in a multilateral or regional framework, which it initially did. But what induced the country to seek a bilateral trade agreement with the most dominant country in the region? One reason that has been mentioned earlier has been the failure of the regional approaches (particularly SAPTA) to address Sri Lanka’s aspirations for expanded regional trade. The other reason is the long implementation period. Under ILFTA, the bilateral agreement was tailored to address the security concerns of not only Sri Lanka but also India. This is reflected in the very nature of bilateral offers that tilted the benefits in favour of India’s small neighbour. Sri Lanka was granted a longer time frame for moving to a free trade commitment with India and also permitted to retain a much larger number of products in its Negative List as compared to India’s.5 Moreover, a large number of products were offered duty-free by India in the very first year of trade liberalisation.6 The ILFTA addresses the security concerns of both India and Sri Lanka. Fixing quotas on garment and tea imports from Sri Lanka allays the fears and apprehensions of the textile and tea lobbies in India. The inclusion of products in the Negative List is again an instrument to allay the fears of stakeholders in both India and Sri Lanka. Most of India’s products in the Negative List include products mainly of plastic rubber and textile. Sri Lanka’s Negative list includes mainly vegetable (agro) products, prepared food items, and transport equipment. This takes care of the vulnerability of Sri Lanka’s farmers who fear being swamped by cheap food imports from India. The impact of ILFTA on bilateral trade flow between the two countries has been robust, with the smaller partner benefiting proportionately more by accessing the large Indian market. Table A1 reveals the trend. It is remarkable that Sri Lanka’s export to the Indian market expanded from USD 45 million in 2000–2001 (the year ILFTA was launched) to USD 364 million in 2004–2005 – an increase of seven times! During the same period, India’s export to Sri Lanka increased from USD 640 million to USD 1,355 million – an increase of a little more than double. Consequently, India’s export to import ratio, which is as high as 14.2 in 2000–2001, declined to 3.7 in 2004–2005 – a remarkable decline in trade imbalance between the two countries! It must be recorded here that this remarkable increase in Sri Lankan export to the Indian market was not merely due to India’s import liberalisation. In addition, Sri Lanka benefited immensely from capital inflow by Indian investors who found the Sri Lankan investment climate congenial for setting up joint ventures, as well as from wholly owned

294

INDRA NATH MUKHERJI

subsidiaries in that country for not only catering to the Sri Lankan market, but in addition, the southern Indian market, given its geographical proximity.

8. CONCLUDING OBSERVATIONS India’s trade with its neighbouring countries has been growing rapidly in the new century. The growth in trade has however been mainly in terms of exports. South Asia is providing a growing market for India’s exports. The share of South Asia in India’s world exports has also been increasing. However, India sources very little from the region. The share of South India in India’s global imports has remained at 1%. The resulting trade imbalance between India and its neighbouring countries has remained a bone of contention. This is particularly so with Bangladesh. Although from the point of view of economics, each country needs to balance its global trade (in fact global trade and payments), the politics of this issue is difficult to dispel. Therefore, through regional trading arrangements India should endeavour to give duty-free access to Bangladesh in particular (as India already has free trade agreements with Nepal, Bhutan, and Sri Lanka). Secondly, the granting of duty-free access by India also should ensure that it does not result in third country products flooding the Indian market. Thus, the rules of origin have to be in place. Confidence-building with neighbours needs to be balanced with national security. Thirdly, India should take a positive role in capacity-building with its neighbours to assure them that nontariff barriers do not become insurmountable barriers for their entry to the Indian market. Mutual recognition of standards and accreditation of laboratories for testing assume crucial significance. Finally, there is the urgent need to link trade with investment liberalisation. South Asian countries need to restructure their industries to become competitive. This can happen when there is unhindered flow of private capital across the region. In conclusion, it may be stated that the fact of India being a dominant country in the region need not necessarily result in a dominant-dependent relationship as illustrated by its trade relations with Bhutan and Sri Lanka. India’s vast market in fact provides a window of opportunity for its smaller neighbours. It is important to note that its trade imbalance is not sharpened with countries with which it has bilateral free trade agreements. On the contrary, this is in fact more marked in the case of countries with which it

India’s Trade with its South Asian Neighbours

295

has no such agreement. However, in order to widen and deepen interdependence, it is necessary to link trade with investment and develop appropriate synergies between them. Further, now that SAFTA has been operationalised, India should announce the elimination of all duties as also a complex variety of non-tariff barriers in favour of least developed member states.7 In reality, this will mean opening its market to products from the region.

NOTES 1. Bakht, 1996, quoted by Rahman (1998). 2. Chaudhury, 1995, quoted by Rahman (ibid., p. 37). 3. Ibid., p. 59. 4. Agreed Minutes of the Third Meeting of the Bangladesh–India Joint Working Group on Trade 1–2 August, 2005, Dhaka. 5. A Negative List refers to products on which no trade concessions would be permitted. 6. For details of concessions offered, see Mukherji (2005a). 7. Under SAFTA, all non-LDCs are required to provide duty-free access to products of LDCs in three years from the coming into force of the Agreement in January 2006.

REFERENCES Bakht, Z. (1996). Cross border illegal trade in Bangladesh: Composition, trends, and policy issues. Paper presented at ESCAP/UNDP/BIDS Seminar, October 1996. Chaudhury, S. K. (1995). Cross border trade between India and Bangladesh: NCAE. New Delhi: TCDC. FICCI, Status paper: India-Pakistan economic relations. New Delhi, undated, p. 8. Mukherji, I. N. (2004). Indo-Bangladesh trade: Analysing impact of trade preference on growth and structure of bilateral trade. Paper presented at Indo-Bangladesh Dialogue organized jointly by India International Centre, New Delhi and Centre for Policy Dialogue, Dhaka, New Delhi, 27–28 August 2004. Mukherji, I. N. (2005a, 13–15 August). India Sri Lanka Comprehensive cooperation agreement: A model for South Asian regional cooperation. Paper presented at Thirteenth SAARC Writer’s Conference in Peredeniya University, Sri Lanka. Mukherji, I. N. (2005b, 10–12 January). South Asian free trade area and Indo-Pakistan trade. Presented at 20th Annual General Meeting, Pakistan Society of Development Economists, Islamabad. Rahman, M. (1998). Bangladesh–India bilateral trade: Current trends, new perspectives, new challenges. BIISS Journal, 19(1), 37.

S. No. Country

1996– 1997

Table A1.

ANNEX

1999– 2000

2000– 2001

2001– 2002

2002– 2003

India–South Asian Trade: (Value in US $ Million).

1998– 1999

2003– 2004

2004– 2005

296

1997– 1998

India’s exports to South Asian countries World 33470.00 35006.00 33219.00 36822.00 44560.00 43827.00 52719.00 63843.00 48389.85 1 Afghanistan 22.74 21.25 12.81 33.20 25.86 24.37 60.77 145.47 157.73 2 Bangladesh 868.96 786.46 995.64 636.31 935.04 1002.18 1176.00 1740.75 1606.56 3 Bhutan 21.98 13.33 9.56 7.57 1.08 7.60 39.05 89.49 84.58 4 Maldives 10.36 8.74 8.38 7.30 24.61 26.88 31.59 42.34 42.53 5 Nepal 165.72 170.05 122.41 151.23 140.84 214.46 350.36 669.36 743.03 6 Pakistan 157.22 143.15 106.10 92.95 186.83 144.01 206.16 286.94 509.27 7 Sri Lanka 477.41 489.23 437.13 499.27 640.14 630.89 920.98 1319.20 1355.23 Total South 1724.39 1632.20 1692.02 1427.83 1954.41 2050.38 2784.90 4293.55 4498.93 Asia % Share of 5.15 4.66 5.09 3.88 4.39 4.68 5.28 6.73 9.30 Export

India’s imports from South Asian countries World 39132.00 41484.00 42389.00 49671.00 50536.00 51413.00 61412.00 78150.00 61937.79 Afghanistan 3.05 10.70 28.14 21.06 26.59 17.52 18.46 40.51 46.32 Bangladesh 62.23 50.81 62.40 78.15 80.51 59.12 62.05 77.63 59.26 1 2

INDRA NATH MUKHERJI

3 Bhutan 4 Maldives 5 Nepal 6 Pakistan 7 Sri Lanka Total South Asia Export/import ratio World Afghanistan Bangladesh Bhutan Maldives Nepal Pakistan Sri Lanka South Asia 1 2 3 4 5 6 7 Total

0.86 7.46 13.96 0.65 60.94 2.59 4.35 11.14 7.12

33.78 0.17 64.07 36.16 42.84 242.31

0.84 1.99 15.48 0.99 36.42 1.79 3.22 16.19 6.66

13.44 0.24 95.16 44.45 30.21 245.00

0.78 0.46 15.96 1.56 167.60 0.85 0.49 11.60 3.43

6.13 0.05 144.85 214.45 37.68 493.70

0.74 1.58 8.14 0.42 18.25 0.80 1.36 11.29 3.41

18.01 0.40 188.63 68.21 44.23 418.70

0.88 0.97 11.61 0.05 129.53 0.55 2.92 14.22 3.97

21.09 0.19 255.08 64.03 45.01 492.49

0.85 1.39 16.95 0.32 67.20 0.60 2.22 9.36 3.48

23.92 0.40 355.94 64.76 67.38 589.04

0.86 3.29 18.95 1.21 95.73 1.24 4.60 10.14 5.25

32.15 0.33 281.76 44.85 90.83 530.43

0.82 3.59 22.42 1.71 114.43 2.34 4.98 6.77 6.05

52.37 0.37 286.04 57.65 194.74 709.32

0.78 3.41 27.11 1.19 73.33 2.15 5.49 3.72 4.59

71.00 0.58 345.81 92.74 364.39 980.10

India’s Trade with its South Asian Neighbours

297

2001– 2002

2.18 42.23 1.40 1.13 12.58 7.40 33.07 100.00

2002– 2003

5.71 10.94 7.38 0.05 40.33 8.13 27.45 100.00

3.39 40.54 2.08 0.99 15.59 6.68 30.73 100.00

2003– 2004

4.73 6.05 7.24 0.06 35.28 9.46 37.18 100.00

3.51 35.71 1.88 0.95 16.52 11.32 30.12 100.00

2004– 2005

298

2000– 2001

1.19 48.88 0.37 1.31 10.46 7.02 30.77 100.00

3.48 11.70 6.06 0.06 53.12 8.46 17.12 100.00

Table A2. India–South Asian Trade: Percent Share in Regional Trade.

1999– 2000

1.32 47.84 0.06 1.26 7.21 9.56 32.75 100.00

2.97 10.04 4.06 0.07 60.43 10.99 11.44 100.00

1998– 1999

1996– 1997

2.33 44.56 0.53 0.51 10.59 6.51 34.97 100.00

5.40 16.35 4.28 0.04 51.79 13.00 9.14 100.00

1997– 1998

India’s exports to South Asian countries 1 Afghanistan 1.32 1.30 0.76 2 Bangladesh 50.39 48.18 58.84 3 Bhutan 1.27 0.82 0.57 4 Maldives 0.60 0.54 0.50 5 Nepal 9.61 10.42 7.23 6 Pakistan 9.12 8.77 6.27 7 Sri Lanka 27.69 29.97 25.83 Total South Asia 100.00 100.00 100.00

5.03 18.66 4.30 0.10 45.05 16.29 10.56 100.00

S. No. Country

India’s imports from South Asian countries 1 Afghanistan 1.26 4.37 5.70 2 Bangladesh 25.68 20.74 12.64 3 Bhutan 13.94 5.49 1.24 4 Maldives 0.07 0.10 0.01 5 Nepal 26.44 38.84 29.34 6 Pakistan 14.92 18.14 43.44 7 Sri Lanka 17.68 12.33 7.63 Total South Asia 100.00 100.00 100.00

Note: For World data is available: April–January between 2003–2004 and 2004–2005 (P). Source: Database DGCI&S, India.

INDRA NATH MUKHERJI

TRADE LIBERALIZATION AND NATIONAL SECURITY IN THE CONTEXT OF WTO FRAMEWORK Bisweswar Bhattacharyya General Agreements on Tariffs and Trade (GATT) was set up in 1947 when the ‘Contracting Parties’ were most concerned with the consequences of import restrictive measures. The experience of ‘beggar-thy-neighbour policies’ followed by some major trading nations during the great depression had clearly revealed the dangers that the global economy could face from a regression to such policy measures in the future. As a consequence, GATT and also its still-born predecessor, the International Trade Organization (ITO), focused on enlarging and ensuring market access. However, recognizing the fact that governments would require policy space to regulate imports in specific circumstances, GATT provided certain principles for orderly management of the global trade order. GATT (1947) was subsumed in World Trade Organization (WTO) effective from 1st January 1995. In this paper, GATT and WTO have been used interchangeably for the pre-1994 period.

OPERATING PRINCIPLES OF GATT There are four basic principles (GATT, 1947): 1. Governments desirous of protecting their industries from foreign competition may do so, at a reasonable level, and very importantly Conflict and Peace in South Asia Contributions to Conflict Management, Peace Economics and Development, Volume 5, 299–313 Copyright r 2008 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1572-8323/doi:10.1016/S1572-8323(08)05019-4

299

300

BISWESWAR BHATTACHARYYA

through tariffs. The principle of tariff-based protection is reinforced by provisions that prohibit the usage of quantitative restrictions. There are exceptions though. GATT does allow restrictions at times of balance of payments (BOP) difficulties, especially for the developing countries (GATT Articles XI, XII, and XVIII). Before the Uruguay Round (UR), agricultural trade was not under the tariff protection regime. UR brought agriculture under the GATT discipline. Non-tariff measures on agricultural imports were tariffed (UR AOA) (WTO, 1994). 2. Further, the understanding on BOP provisions of GATT 1994 had sought countries, both developed and developing, to use price-based measures, rather than quantitative restrictions, at times of BOP difficulties. QR measures may be used only at times of emergency (WTO, op. cit.). 3. WTO requires that tariffs and such other protective measures are to be reduced progressively and eliminated, if possible, through a deliberative negotiating process. In addition, to prevent regression as well as to provide predictability, GATT requires ‘Binding’ of negotiated outcomes. Binding means an obligation for the member states not to impose tariffs, which are ‘in excess of those’ negotiated in earlier rounds (In GATT terminology, multilateral negotiations are referred to as Rounds.) (GATT Preamble, Article 11:1(b), Article XXVIII bis). 4. WTO requires that all measures are imposed in a non-discriminatory way. In GATT terminology, the principle is referred to as most-favoured-nation (MFN) clause. What it denotes is that any concession given by one member state to another will be extended unconditionally to other member states as well. This obligation is symmetrical with both exports and imports (Article 1.1). The obligation of non-discrimination also applies to usage of quantitative restrictions where these are permissible (Article XIII). Exceptions to the MFN principles are allowed, subject to certain conditionalities, in the case of trade arrangements on preferential basis or non-reciprocal market access agreements (Article XXIV, Tokyo Round enabling clause). 5. Complementing the MFN principle is the final rule of GATT that is of national treatment. This principle provides that member states shall accord to imported products treatment, which is no less favourable than what is applicable to like products produced domestically (Article III).

THE EMERGING GLOBAL TRADING SCENARIO The GATT/WTO regime based on these four basic principles has played a reasonably productive role in the development and governance of global

Trade Liberalization and National Security

301

trade. However, as observed at the outset, the focus of the GATT/WTO regime has so far been the expansion and continuation of market access already negotiated. This, in other words, meant a focus on import control measures. The ambitious Doha Development Agenda that seeks to liberalize agriculture and services trade as well as the autonomous trade liberalization process, is expected to lead to a much greater integration of national economies. Agriculture that has so far been treated as a sector deserving a higher level of protection from a strategic standpoint, is now poised to be opened to global competition. Greater trade liberalization will also lead to a specialization of a country in terms of identified value-chains where it enjoys a competitive advantage. This leads to a situation where a country’s trade performance will be substantively dependent on its access to global supply markets for imports. For example, a country going for steel manufacturing but does not have the required raw materials will have to ensure their supplies. Posco, a leading South Korean company, which is globally the fourth largest producer and arguably the most competitive, has entered into an MOU with the Orissa government for a 10 million steel plant, with the basic objective of tying-up the supply chain of iron ore (See www.orissagovt.in). Export restrictions of raw materials by the producing countries can create havoc for countries that are dependent on overseas supplies of strategic raw materials.

FOOD SECURITY Three major areas of concern relating to export restrictions can be envisaged. First is the concern with food security. A country may open-up its agriculture and find, that due to global competition, its import dependency on food has gone up. If the global food market prices are erratic, or there are supply shortfalls, its food security will get adversely affected. Export restrictions by major supplying countries can aggravate the market-related uncertainties, creating further problems for importing countries. India has raised the issue of food security in WTO negotiations in the wider context of ‘livelihood security’. Given the fact that a majority of Indian farmers are ‘resource-poor’, giving protection to them from international competition is required, in the absence of which their livelihood is likely to be adversely affected with serious consequences for internal economic, social and political stability (see www.wto.org, see Indian submissions under agriculture negotiations).

302

BISWESWAR BHATTACHARYYA

Even in the case of the traditional concept of food security, i.e., access to domestic food supply, India can have concerns in the near future. Various factors are leading to an increasing decline in the per capita availability of food grains. Food grain productivity is falling with the decline of public investments in agriculture. The massive food grains stocked a few years back have now disappeared. Some forecasts indicate that with the current growth rates in production and consumption of rice, India may turn into a net rice importer in the near future. With increasing efforts to diversify Indian agriculture away from rice and wheat, India’s import dependency for food may rise (Bhattacharyya and Pal, 1999). Globally rice production is limited to a few countries. Major exporters of wheat, though somewhat more in number, are still limited. In such a context, export restrictions by one or a few leading exporters can cause major economic and political problems for import-dependent countries.

ENERGY SECURITY The strategic importance of a country’s dependence on imported energy sources is well recognized. The United Nations Development Programme (UNDP) report (energy after Rio) suggests that national security issues can arise out of conflicts from the harnessing of rivers for hydroelectric power in watersheds covering several countries. Energy security concerns can also arise out of cross national gas lines. But the greatest concerns have been raised with respect to oil trade. Many developed countries, such as the USA, Western Europe and Japan are dependent to the extent of 60 per cent on imported oil. And the primary source of supply is the Middle East. The energy security concerns include (Bhattacharyya, 2005):    

Risk of physical disruption in supplies Risks associated with the excessive dependence on one/a few suppliers Exposure to infrastructure failure Risks associated with high and volatile energy prices

India’s energy requirements are estimated to rise at an annual rate of 5–6 per cent; India and China represent two of the fastest growing markets in the world. India’s domestic oil production capacity, as well as its proven reserves, is limited, and therefore additional demand would have to come from imports. India’s share of imported oil in total has already shot-up from 40 per cent in 1985–1986 to more than 65 per cent by 2000.

Trade Liberalization and National Security

303

Natural gas is India’s fastest growing fuel source and is expected to grow at an annual rate of 7 per cent. Domestic production currently accounts for about half of domestic consumption. Imports are made in the form of liquefied natural gas (LNG). India gets the bulk of its oil imports from the Middle East, which is a highly volatile region. This obviously raises the risks and uncertainties with regard to India’s energy security. Oil supplies from the Gulf got disrupted at least on seven occasions since 1950 (Iranian boycott 1951–1953, Suez crisis 1956, Six Day war 1967, Yom Kippur war 1973, Iranian revolution 1979, Iran–Iraq war 1980, Gulf crisis 1991). All those were political crises. The danger of supply disruption also arises from the distributional logistics. India imports from the Gulf through the Strait of Harmus, which connects the Persian Gulf to the Gulf of Oman and the Arabian Sea. Closure of the Strait, either due to accident or terrorist attack, will practically shut-off Gulf oil supplies to the east, including India. Research studies indicate (TERI):  The long-term demand outlook for South Asia suggests a rising share of oil in the primary energy mix. Absolute oil requirements accordingly will get magnified.  A larger proportion of this increased oil requirement would have to be imported – imports reaching to about 2 Mb/day by 2010.  Most of this oil would have to be imported from the Middle East, and South Asia’s vulnerability will be higher.  A strategic reserve of 90 days import of crude oil in 2010 would have an estimated capital cost of USD 6 billion and an annual recurring cost of USD 300 million.  Strategic reserves are not easy to use, and benefits are uncertain.  While oil substitution by gas is the most promising option, gas imports would also be necessary in the future. Only limited progress on transborder arrangements has been made, however, due to political differences between India, Pakistan and Bangladesh. While gas imports in the form of LNG are possible, this is costlier than supplies through pipelines. In addition to the traditional sources of concern over energy security, such as importance of free and secure access to sea-lanes, new concerns have cropped-up. One such issue is obviously the terrorist-inspired threat to disruption in the supply system, either in the source country (e.g. Saudi Arabia) or along the supply chain. With the growing importance of natural gas in total domestic fuel consumption, the extent of threat perception

304

BISWESWAR BHATTACHARYYA

associated with sea-lanes gets reduced. But then transportation of natural gas raises a whole set of security concerns, namely, political stability requirements for cross-border pipelines projects, security of pipelines once these are in place and the need for multilateral and bilateral cooperation. At a more macro-level, there is a considerable debate as to whether governments should trust more the sophisticated energy market of today where privatization, competition and open market could provide the required resources, capital and infrastructure. The debate has got intensified with the ENRON crisis. But despite this, there have been almost irreversible shifts in government policy making, even in India, towards a greater opening up of the domestic energy market. However, in general, countries that are more dependent on foreign sources of supplies are more reluctant towards market-based solutions.

WATER SECURITY The third area of concern is possibly access to sweet water. Global supply of potable water is limited and unequally distributed (Katsumi, 2001). Some countries such as Singapore and Hong Kong are largely dependent upon imported drinking water from neighbouring countries while a country like Canada is blessed with a huge reserve of drinking water and a much lower population. By 2025, some experts predict that more than 30 countries will not be able to provide 1,000 cubic metre of water per capita per year, which is generally considered as a minimum requirement. With changes in the technology of bulk transportation of water, the future will see increased activity on the cross-border transactions in water. These should be kept conceptually different from the international regulations of rivers flowing through multiple countries. This has problems of its own, as has been recently demonstrated by the India–Pakistan differences of opinion on the Baglihar Dam issue as well as the sharing of river water between Bangladesh and India.

EXPORT CONTROL REGIME IN WTO Given the importance of access to the three most critical natural resources, viz, food, water and energy (basically crude oil and gas) in an increasingly integrated world, it is necessary to look into the export control regime as it is now in WTO.

Trade Liberalization and National Security

305

(i) Article XI of GATT provides that general elimination of quantitative restrictions shall not extend to the following: 2(a) Export prohibitions or restrictions temporarily applied to prevent or relieve critical shortages of foodstuffs or other products essential to the exporting contracting party; WTO analytical index reveals that the words ‘prevent or’ were added ‘to enable a member to take remedial action before a critical shortage has actually arisen’ (WTO, 1995). This is important because such export controls become WTO-legal, even when based on anticipatory shortages. The second clarification to emerge is that the words ‘essential to the exporting country’ should be judged in relation to the particular country concerned.’ This provides a greater degree of freedom to the concerned government to decide what constitutes ‘essentiality.’ (ii) Article XX (g) of GATT provides for trade restrictive measures, if these are introduced relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption;

The 1988 panel report on ‘Canada-Measures affecting exports of unprocessed Herring and Salmon’ observed that while some of the subparagraphs of Article XX require that the measure must be ‘necessary’ or ‘essential’ to the achievement of the policy purpose, the sub-paragraph (g) has no such requirement. This suggests that Article XX(g) does not only cover measures that are necessary or essential for the conservation of exhaustible natural resources, but also a wider range of measures (WTO, op. cit., p. 584). Since crude petroleum, gas and possibly water can be considered as exhaustible natural resources, the current WTO regime allows the governments to restrict their exports on a variety of grounds, subject to the preamble of Article XX. It is instructive to keep in mind that some of the major oil and gas producers are not members of WTO. (iii) However, the most important provision in the current context is Article XXI: security exceptions. While entering into multilateral agreements, member states ‘commonly reserve the right to subordinate certain provisions of the agreement to a national-security exception, a right entitling each nation to place its national security interests ahead of specified multilateral obligations’ (Cone, 2001).

306

BISWESWAR BHATTACHARYYA

Article XXI provides: Nothing in this agreement shall be construe (b) to prevent any contracting party from taking any action which it considers necessary for the protection of its essential security interests (ii) relating to the traffic in arms, ammunition and implements of war and to such traffic in other goods and materials as is carried on directly or indirectly for the purpose of supplying a military establishment; (iii) taken in time of war or other emergency in international relations; The coverage of the exemption is fairly broad. It was observed by one of the drafters of the original charter: ‘It is really a question of balance. We have got to have some exceptions. We cannot make it too tight because we cannot prohibit measures, which are needed purely for security reasons. On the other hand, we cannot make it so broad that, under the guise of security, countries will put on measures which really have a commercial purpose’ (WTO, op. cit., p. 600). National security exceptions are incorporated in almost identical terms in GATT Article XXI, General Agreement on Trade in Services (GATS) Article XIV bis and TRIPs Article 73. Experts are of the opinion that a tacit agreement among states to exclude the trade distortions originating from the scope of GATT/WTO dispute settlement system (UNCTAD/ICTSD). This is presumably because WTO is not considered as the appropriate forum for dealing with national security issues (UNCTAD/ICTSD, 2004). The most clearly articulated view of how governments look at security issues was found in the statement of the European Economic Community (EEC) representative in the context of suspension of imports for noneconomic reasons from Argentina in 1982. It was stated that ‘the EEC and its member states had taken certain measures on the basis of their inherent rights, of which Article XXI of the General Agreement was a reflection. The exercise of these rights constituted a general exception, and did not require notification, justification, or approval’ (WTO, op. cit., pp. 600–601). Similar views were expressed by other countries such as Canada and Australia. On the other hand, Argentina observed ‘that in order to justify restrictive measures, a contracting party invoking Article XXI would specifically be required to state reasons of national security. There were no trade restrictions which could be applied without being notified, discussed and justified’ (WTO, op. cit., pp. 600–601). Argentina also requested an interpretation of Article XXI. Though it was not done, GATT did adopt

Trade Liberalization and National Security

307

a decision concerning Article XXI of the General Agreement in 1982, which is as follows (WTO, op. cit., pp. 605–606): Considering that the exceptions envisaged in Article XXI of the General Agreement constitute an important element for safeguarding the rights of contracting parties when they consider that reasons of security is involved; Nothing that recourse to Article XXI could constitute in certain circumstances, an element of disruption and uncertainty for international trade and affect benefits accruing to contracting parties under the General Agreement; Recognizing that in taking action in terms of the exceptions provided in Article XXI of the General Agreement, contracting parties should take into consideration the interests of third parties which may be affected; That until such time as the Contracting Parties may decide to make a formal interpretation of Article XXI is appropriate to set procedural guidelines for its application;

The Contracting Parties decide that: 1. Subject to the exception in Article XXI: contracting parties should be informed to the fullest extent possible of trade measures taken under Article XXI. 2. When action is taken under Article XXI, all contracting parties affected by such action retain their full rights under the General Agreement. 3. The Council may be requested to give further consideration to this matter in due course. However, the scope of Article XXI is still fairly vague. Every member state can attempt to interpret it to justify its actions. And these interpretations can effectively broaden the scope of the security exceptions. Two instances are cited. In 1961 on the occasion of the accession of Portugal, Ghana stated that its boycott of Portuguese goods was justified under the provision of Article XXI: (b) (iii), noting that ‘under this Article each contracting party was the sole judge of what was necessary in its essential security interest.’ There could therefore be no objection to Ghana regarding the boycott of goods as justified by security interests. It might be observed that a country’s security interests might be threatened by a potential as well as an actual danger. The Ghanaian government’s view was that the situation in Angola was a constant threat to the peace of the African continent and that any government action, which by bringing pressure to bear on the Portuguese

308

BISWESWAR BHATTACHARYYA

government might lead to a lessening of this danger, was therefore justified in the essential security interests of Ghana (WTO, op. cit, p. 600). During discussions in the Geneva session of the Preparatory Committee, a question was put whether the phrase ‘for the purpose of supplying a military establishment’ would permit restrictions on the export of iron ore when it was believed that the ore would be used by ordinary smelting works and ultimately for military purposes by another country. It was stated in response that ‘if a member exporting commodities is satisfied that the purpose of the transaction was to supply a military establishment, immediately or ultimately, the language would cover it’ (WTO, op. cit., p. 602).

GATT/WTO JURISPRUDENCE ON ARTICLE XXI Given such a loosely worded provision, it could have been expected that there would be a plethora of Article XXI invocations. However, the case is contrary. In the first GATT reference to Article XXI in 1949, Czechoslovakia stated ‘every country must be the judge in the last resort on questions relating to its own security. On the other hand, every contracting party should be cautious not to take any step which might have the effect of undermining the General Agreement’ (WTO, op. cit., p. 600) (WTO Al. 600). From the record it seems that GATT/WTO members have acted prudently so far: ‘WTO member states have had recourse to the national-security exceptions but rarely, and only when there was at least a colourable argument that related to actual or threatened hostilities between states’ (Cone, op. cit.). This is despite the fact that the wording of Article XXI is broader than those in Article XX. Crucially, there is no chapeau in Article XXI limiting the scope of the exceptions. In such a case, there can be genuine difficulty in drawing a precise line between national security and political reasons (Jackson, 1969). Though it is somewhat easier to determine whether commercial considerations are there behind the invocation of security interests, it is not easy to revoke the essential right of invocation, apart from putting moral and ethical pressures (see below the Swedish case). Only three cases had come under Article XXIII (dispute settlement) of GATT 1994 with reference to Article XXI. 1. Immediately after the formation of GATT and in the context of the postSecond World War political developments, the US imposed a ban on the export of certain products to Czechoslovakia under a system of export controls. Czechoslovakia argued that the ban violated Articles I and XIII. The US defense was that these restrictions were justified under

Trade Liberalization and National Security

309

Article XXI(b) (ii). In a decision of 8 June 1949 under Article XXIII:2, the Czechoslovakian case was rejected. 2. In May 1985, the US had imposed a trade embargo against Nicaragua on political considerations. While a panel was established, its terms of reference were drawn in a way, due to the US pressures, that the panel was not ‘to examine or judge the validity or the motivation for the invocation of Article XXI:(b)(iii) by the United States’ (WTO, op. cit.). Nicaragua’s case was that these measures violated Articles I, II, V, XI, XIII and Part IV of the GATT, and that ‘this was not a matter of national security but one of coercion,’ while the US case was that these measures were justified under security exceptions. Because of the limitation on the mandate, the panel ‘decided not to propose a ruling in this case on the basic question of whether action under Article XXI could rectify or impair GATT benefits of the adversely affected contracting party.’ The panel, however, raised an important issue with respect to the restricted mandate of the panel.1 If it were accepted that the interpretation of Article XXI was reserved entirely to the contracting party invoking it, how could contacting parties ensure that this general exception to all obligations under the general Agreement is not invoked excessively or for the purposes other than those set out in this provision? If Contracting Parties give a panel the task of examining a case involving an Article XXI invocation without authorizing it to examine the justification of that provision, do they limit the adversely affected contracting party’s right to have its complaint investigated in accordance with Article XXIII:2?

On the other hand, the complexity and sensitivity of the issues were highlighted by the US in the council meeting: Nullification or impairment where no GATT violation had been found was a delicate issue, linked to the concept of ‘reasonable expectations’. It was not simply a question of trade damage, since no one doubted the existence of trade damage. Applying the concept of ‘reasonable expectations’ to a case of trade sanctions motivated by national security considerations would be particularly perilous, since at a broader level those security considerations would enter into expectationsy .’ (WTO, op. cit., p. 608)

3. In November 1991, the European Commission (EC) imposed trade measures against Yugoslavia on the ground that preferential treatment of the country could no longer be upheld and justified for trade measures on the consideration of its essential security interests, as available under Article XXI. In February 1992, Yugoslavia requested establishment of a panel under Article XXIII:2. While the panel was set up in March 1992, due to the uncertainties regarding the status of Serbia and Montenegro as

310

BISWESWAR BHATTACHARYYA

party to the GATT, the panel proceedings were suspended (WTO, op. cit., pp. 604–605).

NATIONAL SECURITY ISSUES OUTSIDE XXI The US Cuban Liberty and Democratic Solidarity Act of 1996, popularly known as Helms-Burton Act, imposes trade restrictions on goods of Cuban origin as well as possible refusal of visas and work permits of non-US nationals/firms having economic activities in Cuba. The EU sought the establishment of a panel on the ground that the act violated many provisions of GATT, including MFN treatment. The US responded with the applicability of Article XXI for the measures. The panel suspended its work at the request of EU in April 1997 after bilateral consultations (Alexander, 1997). There was a case invoking Article XXI that did not reach the establishment of a panel stage. In April 1982, The EEC member states of Australia and Canada suspended imports from Argentina following the Falkland war. In notifying these measures, the EC justified these measures ‘on the basis of their inherent rights of which Article XXI of the General Agreement is a reflection’ (WTO, op. cit). Argentina sought an interpretation of Article XXI, which GATT did not take up. The dispute led, however, to the adoption of the ministerial decision of November 1982 (see text pp. 10–11). The issue of export or import controls in the context of security also came up in relation to what is popularly known ‘conflict diamond and Kimberley Process Certification Scheme’. Since the process arises out of the UN General Assembly resolution 55/56 (2000), there was no legal commitment. Therefore, the scheme as such does not constitute a trade measure in WTO terms and is not under scrutiny of the WTO. However since the Kimberly Process Certification Scheme invites participants to adopt trade measures at national level, if necessary, the question of WTO will arise at the level of national implementation. It was felt that Article XXI(ii) and (iii) cover the ban/control on conflict diamonds, though there has been no dispute, so far on this.2

EXTENSION TO TRANSIT TRADE Security issues with respect to cross-border pipeline projects for oil and gas have now emerged as an important area for concern. WTO-legal regime so

Trade Liberalization and National Security

311

far has not dealt directly with this issue. There are, however, provisions that can be interpreted to cover cross-border supplies through pipelines and make them subject to WTO legal obligations. These provisions are Article V (Freedom of Transit) and Article III (National Treatment). One-way is to specifically include pipelines in Article V. This may result in the transiting country taking obligations for the security of the pipelines. The National Treatment clause (Article III) will also provide support to this guarantee. However, the exception of Article XXI will continue to apply, even if such extension of coverage becomes possible.

IMPLICATIONS OF GATT ARTICLES ALLOWING EXPORT CONTROLS Earlier in the paper, we have analyzed all the provisions in the GATT/WTO framework that allow export control measures. It has been seen that export controls are allowed essentially as derogations from free trade, which is the objective under certain specified circumstances. This system has worked fairly well so far. The issue is, in the coming decades as the national economies get more and more integrated, whether this system will be enough for the economic security of the increasingly strategic importdependent economies. The most ambiguous and potentially most comprehensive provision is of course contained in Article XXI. As the Swedish case has shown, the national security provision can be invoked on economic grounds. Sweden imposed a global import quota for certain types of footwear, with justification under Article XXI, arguing that ‘the decrease in domestic production has become a critical threat to the emergency planning of Sweden’s economic defence as an integral part of the country’s security policy.’ This policy necessitates the maintenance of a minimum domestic production capacity in vital industries. Such a capacity is indispensable in order to secure the provision of essential products necessary to meet basic needs in case of war or other emergency in international relations.3 Discussions in GATT revealed doubts by many members to extend Article XXI provisions to the economic security of the type Sweden sought to justify. In a similar context, though in this case Article XXI has not been specifically invoked, Pakistan has refused to give MFN treatment to India while India offers this privilege to Pakistan. Pakistan currently allows slightly less than 700 items to be imported from India. One argument, which is quite often given by the Government of Pakistan, is that an MFN

312

BISWESWAR BHATTACHARYYA

extension to India would ruin Pakistani industry and that would create difficulties, both economically and politically. An interesting interpretation of what may constitute national security has come from the deliberations of the US–China Economic and Security Review Commission held on 3–4 February 2005, while examining ‘China and the WTO: Italics Assessing and Enforcing Compliance’ (see www.uscc.gov). One of its recommendations is as follows: Consider imposing an immediate, across-the-board tariff on Chinese imports unless China significantly strengthens the value of its currency against the dollar or against a basket of currencies. The tariff should be set at a level approximating the impact of the undervalued yuan. The United States can justify such an action under WTO Article XXI, which allows members to take necessary actions to protect their national security. China’s undervalued currency has contributed to a loss of U.S. manufacturing, which is a national security concern for the United States.

This is in fact a throwback to the attempt of Sweden in 1975; in fact, it goes much beyond it and opens up possibilities of trade retaliation on the grounds of national security or rather economic security.

CONCLUSIONS Several points emerge from the previous analysis of WTO’s legal framework of export controls in the context of increasing integration of national economies, at least a part of which is due to WTO-negotiated trade liberalization process. First, just as countries need to be assured of the market access of their potential exports in the importing countries – the traditional focus of GATT/WTO legal regime – they also must be assured of due access to the supply markets for their critical imports. This means giving equal importance to both export and import control measures. Second, Article XI:2(a) provides rights to an exporting country to regulate exports on the grounds of actual or perceived domestic shortages. This provision can be used, not necessarily for economic grounds. An interpretation of this provision is called for. Third, the ministerial decision concerning Article XXI of the General Agreement of 30 November 1982 may be revisited for an interpretation of the said Article. Fourth, the possibility of inclusion of pipeline-based supplies under Article V needs to be studied, keeping in view the increasing importance of such supplies in the future.

Trade Liberalization and National Security

313

NOTES 1. GATT, L/6053. 2. Chairman’s non-paper: Kimberley Process Workshop on WTO Conformity, 15–17 February 2002. 3. GATT, L/4250.

REFERENCES Alexander, K. (1997). The Helms-Burtan act and the WTO challenge. Florida Journal of International Law, 1, 487–516. Bhattacharyya, B. (2005). Security dimensions of international trade: Indian perspective (pp. 31–39). Mumbai: Quest Publications. Bhattacharyya & Pal (1999). Implications for food security: Opening up Indian agriculture. Mimeo. New Delhi: IIFT. Cone, S. M. III. (2001). The development of the WTO and the International Criminal Court. Guest Lecture Series. GATT, Legal Texts. 1947. Jackson, J. H. (1969). World trade and the law of GATT (pp. 748–752). Indianapolis: Bobbs Merrill. Katsumi, M. (2001, August). Tradable water in GATT/WTO Law: Need for new legal framework. Paper presented at AWRA/IWLRI-University of Dundee International Speciality Conference. Available at www.awra.org/Proceedings/dundeeol TERI, Energy security concerns and response strategies for South Asia. UNCTAD/ICTSD, TRIPS and Development: Resource book, Part 6 (2004). WTO. (1994). Legal texts, Uruguay Round. WTO. (1995). Guide to GATT law and practice (Vol. 1, p. 326). Cambridge University Press.

This page intentionally left blank

BUSINESS PROCESS OUTSOURCING UNDER GLOBALISATION: IS THE CONFLICT BETWEEN INDIA AND THE USA RECEDING? Dilip Dutta INTRODUCTION Globalisation accompanied by the rapid development of the information and communication technology (ICT) has largely boosted international trade in services over the past decade or so. Because services account for a higher proportion of production costs, firms are taking every opportunity to go for lower-cost solutions for the provision of business process services. International sourcing of business support services has, therefore, been a preferred solution to the ongoing cost pressures and related skill shortages experienced in many developed countries. During the last decade of the twentieth century, the software sector of India’s information technology services (ITS) industry had developed as one of the fastest growing sectors in the economy. Since the beginning of 2001, the traditional ITS companies have been focusing more on the IT-enabled services (ITeS) sector in general and business process outsourcing (BPO)

Conflict and Peace in South Asia Contributions to Conflict Management, Peace Economics and Development, Volume 5, 315–335 Copyright r 2008 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1572-8323/doi:10.1016/S1572-8323(08)05020-0

315

316

DILIP DUTTA

sector, in particular. In fact, the ITeS–BPO segment has quickly emerged as a key driver of growth for India’s ITS industry. The ITeS–BPO segment focuses on people-intensive services that are delivered via electronic mediums such as telecom networks, fax, and Internet to a range of business segments and verticals. Within a very short period of time the ITeS–BPO segment has moved into its consolidation/maturation phase. The country is well positioned to derive benefits from the global ITeS–BPO market. BPO sector has attracted a great deal of attention and controversy both in academic and policy circles particularly since the US presidential campaign during 2003–2004. The loss of jobs in the US together with outsourcing of many service jobs to India has created a domestic and international political controversy both in the US and India. Both countries of large democracies and their politicians, business analysts and economists have gone through the pros and cons of outsourcing process in a globalising world. Although there has been a revisit of the debate during the current US presidential campaign, some better understanding seems to have emerged from the point of view that the offshoring is a creative destruction.

OUTSOURCING: THE NEW INCARNATION In the early 1980s, ‘‘outsourcing’’ typically referred to firms’ sub-contracting of manufactured physical inputs from outside the firm or the country rather than making them inside. Outsourcing or sub-contracting was therefore associated with relocation of low-skill labour-intensive industrial operations to low-wage countries. The globalising world of the recent decades has been going through a stage with increased forces of market deregulation and rapid technological advances. In order to deal with these competitive pressures, firms are resorting to new organisational forms and activities. Apart from reorganising through mergers and acquisitions, joint ventures, and strategic alliances, they are also increasingly adopting business operations outsourcing through external suppliers (domestic or foreign) or foreign affiliates. ‘‘More recent outsourcing practices refer to,’’ what Stefanova (2006, p.7) argues, ‘‘transfer of intermediate products and processes to relatively low-wage labor-abundant countries by using technology-intensive production process typical of the source country.’’ Thus, recent outsourcing practices apply mainly to intermediate products, business process operations, and product-related services. ‘‘Outsourcing’’ is

Business Process Outsourcing Under Globalisation

317

therefore distinguished from export of capital measured as outward foreign direct investment (FDI), or imports of low-skill labour-intensive finished products, although it is related to both. Generally speaking, ‘‘outsourcing’’ goes by a different meaning in recent years and is predominantly focused on a segment of the growing international trade in services. This segment consists of, what Bhagwati (1984) earlier called, ‘‘long-distance’’ services, in the sense that transactions do not require the immediacy of geographical proximity. Outsourcing, thus, can happen through transactions by firms, ‘‘like phone call centres staffed in India’s Bangalore to serve the US customers in New York and X-rays transmitted digitally from Boston to be read in Mumbai (Bombay).’’ Similarly, outsourcing can also take place ‘‘with direct consumption purchases by individuals, such as when someone hires an offshore firm to provide plans for redesigning or redecorating a living room.’’ It is because of the on-going liberalisation of trade in services and rapid developments in ICT, services have become more easily tradable. As services account for a higher proportion of production costs, firms are taking every opportunity to go for lower-cost solutions for the provision of business process services. In recent years, international sourcing of business support services has certainly been a preferred solution to the on-going cost pressures and related skills shortages experienced in many developed countries during the late 1990s.1 Although it is difficult to measure the extent of service outsourcing, the International Monetary Fund’s (IMF) Balance of Payments Statistics Yearbook provide two categories of business support services closely related to outsourcing. They are: (i) computing and information services, and (ii) other business services. While the former category includes data processing, software implementation, and hardware constancy, the later one comprises accounting, management consulting, call centres, and other back-office business operations. Following the IMF’s Balance of Payments Statistics Yearbook 2003, Amiti and Wei (2004, pp. 37–38) note the following: y US business service imports as a share of GDP have roughly doubled in each of the past several decades, from 0.1 percent in 1983 to 0.2 percent in 1993 and 0.4 percent in 2003. In the United Kingdom, the share is about 1 percent of GDP. India, reported to be the recipient of significant outsourcing, itself outsources a large amount of services. Its business services grew from 0.5 percent of GDP in 1983 to almost 2.5 percent of GDP in 2003.In value terms, the United States is the largest importer of business services. But, as a proportion of GDP, trade in business services – like trade in goods – is low compared with that of rest of the world.

318

DILIP DUTTA

INDIA AS THE MOST PREFERRED BPO DESTINATION During the last decade of the twentieth century, the software sector of India’s ITS industry has emerged as one of the fastest growing sectors in the economy with a compound annual growth rate (CAGR) exceeding 50%.2 The software sector, which was worth only Indian Rupees (Rs) 645 crore3 in 1991–1992, had recorded a production turnover of Rs37,750 crore in 2000–2001. Since the beginning of 2001, the traditional ITS companies – as also startups and entrepreneurs – have been focusing more on the ITeS4 component in general and BPO component, in particular. The ITeS sector focuses on people-intensive services that are delivered over telecom networks or Internet to a range of business segments across various verticals such as banking, insurance, manufacturing, contracting, retail and distribution, and government. These people-intensive services include telemarketing, helpdesk support, medical transcription, back-office accounting, payroll management, maintaining legal databases, insurance claim, credit card processing, etc. India, with its strengths in the form of low-cost manpower, a large pool of skilled, English-speaking workforce and government support, has emerged as a preferred destination for outsourced services and is well positioned to derive benefits from the global ITeS market. A majority of the IT/ITS/ITeS–BPO companies in India have already aligned their internal processes and practices to international standards such as International Organisation for Standardisation’s ISO standards, Capability Maturity Model (CMM), and Six Sigma.5 As of December 2006, over 400 Indian ICTrelated companies have acquired quality certifications with 82 companies certified at the highest level 5 of Software Engineering Institute-Capability Maturity Model (SEI-CMM) –– higher than any other country in the world (Economic Survey 2006–2007, p. 146). As regards to the ownership structure and geographic distribution of clients, ITeS businesses presently operating in India are usually classified under two categories: outsourcing services or outlocation services. ‘‘Outlocation’’ services are for captive use by companies while ‘‘outsourcing’’ services are through a third-party service provider.6 Multinationals such as General Electric (GE) that invested in remote services as captive facilities for worldwide group operations had adopted a primarily outlocation focus. India-based Wipro’s Spectramind, e.g., operates as a pure outsourcing service provider. It is funded by banks and venture capital (VC) finance and operates a niche of contact centred services for Fortune 200 companies (Dutta, 2007).

Business Process Outsourcing Under Globalisation

319

Although there are about 210 ITeS companies registered with NASSCOM,7 there are many more players offering a whole range of such services. Several companies such as HSBC, Standard Chartered Bank, American Express, Citi Bank, and British Airways have set up back-office processing centres in India. Indian IT companies like Wipro, HCL Technologies, Mphasis BFL, and private telecom group Bharti Enterprises are among a few that have expanded their services to ITeS. These companies have the advantage of an existing IT customer base so they can tap clients for BPO as well (Dataquest, 2002). As a result, Indian ITeS-component has emerged as a key driver of growth for the ITS industry. As Karnik (2004), President of NASSCOM, rightly argues, ‘‘The Indian ITES-BPO market has achieved historic, unprecedented success following a rather brief evolutionary cycle. Growing even more rapidly than the country’s IT services sector, the BPO market has moved into the consolidation/maturation phase within a short period of time.’’ According to the NASSCOM, exports of Indian ITS industry continued to grow more than 30% for the fourth year in a row with an increase of 33% to touch US$ 23.6 billion in 2005–2006. Of the total exports in 2005–2006, IT software and services grew by 33% to US$17.3 billion, while exports of the BPO industry grew by 37% to US$ 6.3 billion (Economic Times, 2006, June 2). For the year 2006–2007, NASSCOM has estimated that exports of software and services will increase to US$ 21–22 billion, while BPO exports will touch US$ 8–8.5 billion. Although the US and UK have been the two leading markets for India’s software and services exports, recently Japan, Singapore, and Australia have been emerging as India’s prominent export markets as well. India’s ITeS–BPO market has been facing competitive pressures and other challenges8 typical of those faced by emerging markets, two major challenges are related to IT security and BPO backlash related issues.

IT Security Issues and Measures With the growth of IT/ITeS industries in India the issue of network security has gained importance. It has been suggested that India’s IT Act 2000 be amended to include clauses on data protection. There has also been concern regarding identity theft and other security breaches. This can cause substantial losses and hurt consumer confidence in IT-related services. According to the US Federal Trade Commission, 9.9 million Americans were victims of identity theft in 2002 and business losses due to this amounted to $48 billion. Companies conscious of security issues are adopting various

320

DILIP DUTTA

measures to counter the threat. This includes stronger authentication technology, better auditing and reporting, encryption technology and storage of customer data on multiple servers. NASSCOM has called for improved security measures like employee background checks and independent thirdparty security audits. This includes establishment of best practices and implementation of international information security management standards like BS 7799 created by the British Standards Institute. Such measures are required to establish India as a secure outsourcing destination. The issue of intellectual property rights in software has also gained prominence. Industry organisations like NASSCOM and Business Software Alliance are trying to ensure that their members do not use unlicensed or pirated software. BPO Backlash Issue and Consequent Challenges The growth of outsourcing in India and the consequent loss of jobs in the US, UK, and Australia have lead to a backlash in those countries. This had lead to a number of American states taking steps to place legal restriction on outsourcing. The UNCTAD9 suggested that the Indian government should try to bring the issue within the coverage of General Agreement on Trade in Services (GATS) under the World Trade Organization (WTO). It argues that outsourcing has great poverty alleviation potential. Contrary to public perception, the BPO sector employs large numbers of low- and medium-skilled personnel and has substantial multiplier effects on economic growth. The Indian government has taken up the matter with the US government. The Indian government sees this as a barrier to free trade. The US on the other hand contends that the Indian markets are also not very open and therefore India should open its markets further. The Indian side counters by stating that the Indian agricultural sector is fragile and, unlike the US, it does not receive major subsidies. The Federation of Indian Chambers of Commerce and Industry (FICCI) has suggested that India can trade-off some market openness for avoiding the BPO backlash. The NASSCOM also feels that failure of trade talks like the Doha Round of the WTO negotiations would harm the ITeS sector.

THE INTERNATIONAL POLITICAL ECONOMY OF US OUTSOURCING TO INDIA The controversy regarding outsourcing to India has gained great political relevance since the US presidential election in 2004. Responding to the Bush

Business Process Outsourcing Under Globalisation

321

administration’s view that sending jobs overseas would benefit the US economy, Connecticut Democratic Senator Chris Dodd announced in February 2004 the introduction of a new legislation toward ‘‘stopping the needless export of American workplaces.’’ He said that since 2001 the US had lost 2.7 million manufacturing jobs overseas. His proposed legislation was aimed at government contracts for privatising of federal work, federal procurement of goods and services, and state government procurement using federal funds. In order to receive federal grants, the state governments would, according to the proposed bill, have to certify that such funds would not go offshore. This and a host of other laws were being proposed to protect American workers. Besides offshore outsourcing there was also a move to prevent jobs from going to temporary immigrant workers when well-qualified Americans can perform the same job. Legislators in around 15 states in the US had introduced bills along these lines. While Republicans opposed a bill in Colorado, the issue had subsequently gained centre stage in the Democrat versus Republican presidential election debates. In California, a bill had been passed that aimed to stop state service call centres being moved abroad. In New Jersey, there was an attempt to resurrect a bill requiring state contract workers to either be US citizens or legal residents. The state of Indiana had gone a step further and cancelled a 15 million dollar contract given to India’s Tata Consultancy Services (TCS). There were also bills in New York aimed at preventing private businesses that outsourced jobs from receiving state incentives and grants. Initially the arguments for and against outsourcing appeared to be along party lines with the Democrats opposing outsourcing and Republicans generally favouring it. However as the anti-outsourcing movement gained support, even some Republicans came out against it. This became most apparent when N. Gregory Mankiw, the then Chairman of the Council of Economic Advisors spoke in support of outsourcing as ‘‘probably a plus for the economy in the long run.’’ His statement was attacked not only by the then Democratic Presidential candidate John Kerry, but also by Dennis Hastert, the then Republican Speaker of the House of Representatives. Clearly the argument used by Mankiw was not in tune with the political reality of America. Mankiw issued a statement regretting the misinterpretation of his comment, but Democratic opponents of outsourcing were quick to use the issue to attack the US president George W. Bush. Senator Kerry said that his policy would be ‘‘not to export American jobs, but to reward companies for creating and keeping jobs in America.’’ In a scathing attack against Senator Kerry’s statement, Jagdish

322

DILIP DUTTA

Bhagwati, a prominent Economics Professor at Columbia University, remarks: In objecting to moving service jobs overseas, Senator Kerry is wrong on two counts. First, his economics is faulty: the practice only adds to the overall economic pie and improves the competitiveness of American companies. In a world economy, firms that forgo cheaper supplies of services are doomed to lose markets, and hence production. And companies that die out, of course, do not employ people. Second, Mr. Kerry is making a political error. By playing to the understandable but incorrect fears of American workers that outsourcing is ‘taking away’ jobs from Americans, he is painting the Democratic Party into the wrong corner of trade issues.’’ (Bhagwati, 2004)

Much of the popular political rhetoric had been directed against the outsourcing of jobs to India and to a lesser extent loss of American jobs to immigrant Indian IT professionals. Both the US and Indian media had a role to play in this whole saga of outsourcing debate. While the former had projected India as an economy, which was booming due to the arrival of new jobs from abroad, the Indian media had overstated the benefits of even the smallest outsourcing company arriving in India. The US has around 138 million regular jobs of which only a small fraction had been outsourced and a small fraction of that fraction had gone to India. As such the attention received by India was out of proportion when compared to the 500,000 odd jobs it had gained. However, influential media and research publications had projected India as a primary destination for the US outsourcing. Forbes magazine had placed India as the top outsourcing destination due to its large human resource output of 75,000 IT graduates and 2 million Englishspeaking graduates per year. Forbes had also highlighted the positive role played by the Indian government in encouraging outsourcing: ‘‘Outsourcing is so ingrained in the fabric here that the Indian government has a national minister specifically for IT. The government favours IT foreign ownership and imposes no export taxes’’ (see http://economictimes.indiatimes.com (accessed on 10 February 2004)). Similarly, projections of American job loss made in 2003 by John McCarthy, an analyst with the Forrester Research Group, might have scared the average American and portrayed India as the main villain. McCarthy stated that the incidence of job outsourcing would increase from 0.6 million in 2005 to 1.6 million in 2010 and then go up to 3.3 million in 2015. India, which accounted for 85% of outsourcing, was likely to gain many of these jobs (see http://economictimes.indiatimes.com (accessed on 9 October 2003)). Unfortunately, the ground realities for many US technology workers buoy the pessimistic political views on outsourcing and make the argument against it more convincing. Many of these professionals have personally

Business Process Outsourcing Under Globalisation

323

experienced job loss or have had to move to lower paid jobs. While it is obvious that retraining and new job profiles may alleviate their problems, this is by no means easy. Besides outsourcing, many have also had their jobs taken over by lower paid Indian IT professionals residing in the US on H-1B working visas. This has led to political action in October 2003, when the US Congress reduced the number of H-1B visas from 195,000 to 65,000 workers per year (see http://economictimes.indiatimes.com (accessed on 2 February 2004)). This action has hurt the US companies, which were relying on lower paid workers from these visas to improve their profitability. These companies maintained that there were not enough US citizens with adequate training to fill these jobs. For instance, Thom Stohler, vice-president for work force policy for the American Electronics Association, noted in February 2004 that nearly half of the people hired on H-1B visas had graduate degrees, while only 5% of the US population had the same level of education (see http://economictimes.indiatimes.com (accessed on 25 February 2004)). Ironically enough, the visa caps was thought by some to lead to more outsourcing. With a view to curb this trend the US Department of Labour was offering government funded training programmes to ensure that domestic companies no longer rely heavily on foreign IT workers in general and Indian IT workers in particular. Besides the political attempts to thwart the presence of Indian IT professionals in the US, there had also been a widespread social backlash. Fortunately much of this had been restricted to quarrels in Internet chat rooms and online jokes. While much of this was harmless, certain racist comments forced administrators to rename their websites so that any specific reference to India could be avoided. The views of Indian politicians, entrepreneurs, officials, and professionals to the widespread US political and social reactions to India’s success in IT, have ranged from surprised indignation to robust unconcern. L. K. Advani, the former Deputy Prime Minister of India, characterised it as a double standard since the United States was asking other countries to open their markets and at the same time raising protective barriers in its own domestic economy. Advani also stated that the multinational companies were not doing India a favour by investing in it, but were doing so because of its highquality human resources and good scope of profitability (see http:// economictimes.indiatimes.com (accessed on 10 February 2004)). Yashwant Sinha, the former External Affairs Minister of India, found the US views on India needing to open its markets further to be retaliatory. As he remarked, ‘‘(I)t smacks of retaliation that if you (India) don’t open up, we (the US) are going to impose restrictions’’ (see http://economictimes.indiatimes.com (accessed on 3 February 2004)). He too felt that the United States ignores

324

DILIP DUTTA

the economic logic of outsourcing only at the risk of becoming uncompetitive. Arun Shourie, the former Union IT Minister, also felt that the US legislation against outsourcing of federal contracts was against the concept of free trade and would harm multilateral trade negotiations. The Indian IT industry also maintained that laws against outsourcing were contrary to the idea of free trade and competition. However, they were confident that the immediate impact of anti-outsourcing bills would be minimal since these mainly affected government contracts. According to NASSCOM president Kiran Karnik, only less than 2% of India’s US $10 billion annual software export revenues came from the US government-related projects (see http://economictimes.indiatimes.com (accessed on 28 January 2004)). Other industry sources such as the Confederation of Indian Industries (CII) also reflected his views. Appreciating the positive impact of outsourcing on the Indian economy, the Indian government had taken up the matter with the US at the highest level. In fact, both the US President George W Bush and the former Indian Prime Minister Atal Bihari Vajpayee had reaffirmed the Indo– US strategic partnership and realised there was a need to ‘‘correct’’ public perceptions and allay apprehensions on the issue of outsourcing (ibid.). It is true that in the short-term the legislation against outsourcing might not have greatly affected Indian BPO concerns. However, the Indian BPO industry could have been seriously harmed if these political circumstances caused a ripple-effect by extending the concern to the US private sector. For instance, Scottsdale, a small Arizona-based US company dealing with New Jersey welfare processes voluntarily withdrew its operations from India and brought them back to the US after the furore over outsourcing. An additional 20% cost per month was planned to be underwritten by the state government because it wanted to set an example of creating jobs locally (see http://economictimes.indiatimes.com (accessed on 24 April 2003)). However some commentators such as Senator John Cornyn and Congressman Joseph Crowley felt that the problem might have been temporary and would be solved by a bit of quid pro quo. While appreciating the Indian concerns, the US government sources felt that the Indian economy should be opened up further to the US commercial interests. The matter has therefore become something of a trade policy negotiation issue. Paul Craig Roberts, former assistant secretary of treasury during the Regan administration, doubted that offshoring might be beneficial when he commented saying ‘‘offshore production is not a case of the US making good X and trading it to China for good Y. It is a case of the US ceasing to make good X in the US and making it in China instead’’ (see http://economictimes.indiatimes.com (accessed on 26 February 2004)).

Business Process Outsourcing Under Globalisation

325

VIEWS BASED ON BUSINESS EXPERIENCES AND ECONOMIC ANALYSES Indian industry at large views the issue of outsourcing and visa restrictions as an attempt by the US to gain greater access to the Indian market. NASSCOM favours some give and take policy in the matter. Nevertheless, other Indian industry representatives feel that India has already done a lot to open its markets and the US moves might well be counterproductive. Many other commentators find no connection between the openness of Indian markets and outsourcing. They think outsourcing as being of a great benefit to the US itself since the US economy has gained a lot from outsourcing. Culpepper and Associates, which focuses on the technology industry says that after shedding thousands of American jobs in 2001 and 2002, jobs in IT professional services firms showed a 22% rise in 2003. This is in line with Information Technology Association of America’s (ITAA) finding that incremental economic activity from offshore outsourcing created more than 90,000 net new jobs in the US in 2003 and it was expected to create 3.17 new jobs during 2004–2007. According to ITAA, the total vendor savings from outsourcing was expected to climb from $6.7 billion in 2003 to $20.9 billion during the same period of 4 years. Companies are reportedly reinvesting this money in new projects and initiatives aimed at making them more competitive in the global marketplace (Subramanyam, 2004, p. 5). There is of course much controversy regarding the actual economic effects of outsourcing. On the one hand in the short-run, the negative effect on unemployment is quite apparent. In early 2003, Forrester research estimates that 3.3 million service sector jobs and wages worth $136 billion would be outsourced over a 15-year period (see http://economictimes.india times.com (accessed on 15 July 2003)). However, firms need to outsource to cut costs and maintain global competitiveness. According to NASSCOM, in addition to cost savings to the tune of $10–11 billion there have also been quality and productivity benefits to the US industry in general. Furthermore, there have been imports of the US hi-tech goods to meet the capital goods demand of Indian IT firms. Such imports of around $3 billion also benefit the US markets. Indian IT professionals also helped the US economy directly by contributing $500 million in social security contributions, paying an equal sum of income tax and consuming goods and services exceeding $1.8 billion. NASSCOM projects a net saving of $390 billion in future US outsourcing operations that will benefit shareholders and citizens at large.

326

DILIP DUTTA

American academic opinions are divided over the issue of outsourcing. One study published by the University of California, Berkeley researchers in late 2003 had argued that outsourcing could put pressure on existing US jobs, which could result in lower wages and might retard employment (Parasuram, 2003). This study argues that some jobs are vulnerable to the new way of outsourcing, and they include customer–service call centres, medical transcription services, stock market research for financial firms, legal online-database research, and payroll and other ‘‘back-office activities.’’ According to this study, these job positions feature vulnerability-producing attributes such as the work processes that enable telecommuting and Internet work, a lack of face-to-face customer service, high wage differential between countries, a high-information content, and low set-up costs. On the contrary, others argue that the movement of jobs to low-cost countries is unstoppable and ultimately good for the US economy. ‘‘I think overall, the long term, US economy can take it. But there’s going to be a huge amount of restructuring pain,’’ says Rafiq Dossani, a senior research scholar at the Stanford University and co-author of a study on job movement (ibid.). Most US business groups and many economists are in favour of outsourcing. Perhaps Mankiw, Forbes, and Rosen’s (2004) views are the most clearly expressed and therefore the most controversial. They state that: Outsourcing of professional services is a prominent example of a new type of trade. The gains from trade that take place over the Internet or telephone lines are no different than the gains from trade in physical goods transported by ship or plane. When a good or service is produced at lower cost in another country, it makes sense to import it rather than to produce it domestically.

Their views are based on the established benefits of comparative advantage benefiting both the exporter and importer. The only difference between trade in goods and those in services is the use of communication technology for the delivery of the service. But this does not necessarily lead to greater unemployment since people move to other types of jobs, which are created by structural changes in the economy (see http://economictimes. indiatimes.com (accessed on 11 February 2004)). Alan Greenspan, the former chairman of the US Federal Reserve Board, has also defended outsourcing. He has warned that the ‘‘consequences of moving in that direction (protectionism) in today’s far more globalised financial world could be unexpectedly destabilising.’’10 As Hines (2004) notes: Greenspan blamed the movement of jobs overseas on a number of factors, including US consumers’ drive to push down prices through comparison shopping and breakthroughs

Business Process Outsourcing Under Globalisation

327

in productivity. We can erect walls to foreign trade and even discourage job-displacing innovationy. The pace of competition would surely slow, and tensions might appear to ease – but only for a short while. Our standard of living would soon begin to stagnate and perhaps even decline as a consequence.

The views of economists are partly borne out by the experience of businesses. It had been reported that the Atlanta-based Delta Airlines created 1,000 call centre jobs in India in 2003. This not only saved $25 million, but also made Delta Airlines the third best US air carrier of that year. In fact, 1,200 new jobs were created in the US for reservations and sales positions (see http://economictimes.indiatimes.com (accessed on 26 February 2004)). According to the research made in 2003 by McKinsey Global Institute, offshoring brings substantial benefits to the global economy and the lion’s share goes to the US economy: over three-fourths of the value created to the global economy by offshoring goes to the US, and a receiving country like India gets only 22% (Verma, 2003). As the McKinsey research further adds, offshoring creates wealth for the US companies and consumers, and therefore for the US as a whole in the form of cheaper goods and services and making businesses more competitive. By offshoring $1 of US labour costs, $1.45 to $1.47 of value is created globally, and the US captures $1.12 to $1.14 of additional value created, while India gains only 33 cents. Of the $1.12 to $1.14 value potential to the US per dollar of offshoring to India, 58 cents comes from savings accrued to US investors and customers, and 5 cents from import of US goods and services by providers in India. Several producers serving US offshoring market are also incorporated in the US. These companies, McKinsey argues, repatriate their earnings back to the US, which amounts to an additional 4 cents (ibid.). Jagdish Bhagwati, an eminent professor of international economics at the Columbia University, whom we have quoted above, avers that it is technological changes, not outsourcing, have destroyed jobs: Putting these jobs overseas is, in economic terms, no different than importing labourintensive textiles and other goods. In the 1980s and 90s, labor unions warned that imported cheap goods from the Far East would depress our wages and labor standards. But, as virtually any economist who has studied the empirical evidence of the last two decades knows, the overwhelming cause of wage stagnation in manufacturing has been automation within America, not pressure from cheaper imports. The same dynamic applies today – with the technological change affecting service jobs rather than manufacturing. (Bhagwati, op. cit)

Others such as former Labour Secretary, Robert B Reich, also asserts in an article in The Wall Street Journal that improved technology and greater

328

DILIP DUTTA

productivity have led to job losses. Reich feels that the fear of outsourcing is understandable, because over half of Fortune 500 companies are outsourcing software development or expanding their own development centres outside the US (see http://economictimes.indiatimes.com (accessed on 3 November 2003)). He, however, suggests that the long-term solution is to help spur upward mobility by getting more Americans a good education, including access to college (see http://economictimes.indiatimes.com (accessed on 27 December 2003)). The obvious economic benefit of outsourcing has led corporate leaders like Carly Fiorina, the former chairperson and chief executive officer of Hewlett-Packard, to criticise the political moves to curb outsourcing. Fiorina compares the situation to the fears of East Asian competition that existed about two decades ago. At that point instead of resorting to protectionism, the promotion of new technology, R&D, and improved education and training were focussed upon. This led to the longest sustained growth period in the US economic history. Therefore she suggests a parallel strategy of concentrating on developing next-generation industries and talent – in emerging areas like biotechnology, nanotechnology, and digital media distribution – that will create long-term growth and jobs in America (see http://economictimes. indiatimes.com (accessed on 14 February 2004)). Many economists such as Catherine Mann, an economist at the Institute of International Economics in Washington, feel that the outcry against outsourcing overlooks fundamentals of the US economy like the business cycle, manufacturing employment trends, and dollar overvaluation. In fact, while outsourcing was in progress, highly paid US IT jobs were also projected to increase (see http://economictimes.indiatimes.com (accessed on 31 January 2004)). Furthermore, demographic issues also make the US outsourcing a necessity. The US working population is aging rapidly and an additional 15.6 million workers would be required by 2015 to maintain the proportion of the working population at 2001 levels. In comparison, India is at an advantage with regard to the young working population, with those in the 20–34 age group projected to be around 290 million in 2010. Engardio (2006) has recently written on the benefits of using offshore talent to boost the US productivity. He refers to several US firms that have benefited from what he terms ‘‘transformational outsourcing.’’ Such US firms include Proctor and Gamble, DuPont, and ABN Amro. These companies have used the services of outsourcing specialists such as GenPact, Accenture, and IBM services to increase savings and improve growth. A US company, Paper Converting Machines Co (PCMC), based in Green Bay,

Business Process Outsourcing Under Globalisation

329

Wisconsin has, as Engardio notes, seen sales plunge by 40% during 2001–2005 and its workforce downsized from 2,000 to 1,100 with evermounting pressure to relocate production to China. However, a recent turnaround strategy has injected renewed optimism in the company’s future. As part of this strategy, the company plans to shift some design work to its 160-engineer centre in Chennai, India. By having the US and Indian designers collaborate 24/7, PCMC hopes to slash development costs and time, win orders it often missed due to engineering constraints, and keep production in Green Bay. ‘‘Many executives are,’’ as Engardio (ibid.) notes, ‘‘discovering offshoring is really about corporate growth, making better use of skilled US staff, and even job creation in the US, not just cheap wages abroad.’’ He further adds, ‘‘(Outsourcing) can lead to enormous gains in efficiency, productivity, quality and revenues that can be achieved by fully leveraging offshore talent.’’ Some observers even believe big business is on the cusp of a new burst of productivity growth, ignited in part by offshore outsourcing as a catalyst. ‘‘Once this transformation is done,’’ predicts Arthur H. Harper, former CEO of General Electric Co.’s equipment management businesses, ‘‘I think we will end up with companies that deliver products faster at lower costs, and are better able to compete against anyone in the world.’’11 As Tyson (2004), the former White House economic adviser and Dean of London Business School and now back to the University of California, Berkeley, rightly argued, ‘‘offshoring is a process of creative destruction.’’ ‘‘The challenge for the (offshoring) countries’ governments is,’’ as Tyson suggested, ‘‘to develop policies that ease the pain that offshoring inflicts and speed workers’ transition to new jobs.’’ Some kind of wage insurance policies need to be designed in order to cover the displaced workers’ loss of wages due to offshoring until they gain new employment or to make up the difference between the old wages lost and wages paid for new jobs.12 Echoing the similar tone, Alan S. Blinder, Princeton University economist, former Federal Reserve Board vice chairman and perennial adviser to Democratic presidential candidates – very recently argues that the US government needs to do far more for displaced workers than the few months of retraining it offers today. He thinks that the US education system must be revamped to prepare workers for jobs that cannot easily go overseas, and is contemplating changes to the tax code that would reward companies that produce jobs to stay in the US (Wessel and Davis, 2007).

330

DILIP DUTTA

REVISIT OF THE OUTSOURCING DEBATE AND THE FORWARD-LOOKING APPROACH During the current US presidential election campaign the old debates on offshoring seem to have been surfaced again. This time the US Senate prepares comprehensive immigration reform legislation in order to check offshoring through backdoor. As the US Senate gets ready to take up the comprehensive immigration reform legislation, two top lawmakers, Republican Senator Charles Grassley and Democratic Senator Richard Durbin, said: ‘‘More and more it appears that companies are using H-1B visas to displace qualified, American Workers’’ (see http://economictimes. indiatimes.com (accessed on 16 May 2007)). The H-1B visa programme, which was launched in 1990, allows foreign scientists, engineers, and technologists to be employed for up to 6 years in the US, at the end of which they must obtain permanent residency or return home. In May 2007 the Senators have asked nine Indian firms to reveal details about their use of H-1B visas.13 The senators fear the H-1B visa programme is being abused by foreign companies to displace qualified American workers. ‘‘Considering the high amount of fraud and abuse in the visa programme, we need to take a good, hard look at the employers who are using H-1B visas and how they are using them,’’ Grassley said in a statement. ‘‘Supporters claim the goal of the H-1B programme is to help the American economy by allowing companies to hire needed foreign workers. The reality is that too many H-1B visas are being used to facilitate the outsourcing of American jobs to other countries,’’ Durbin said (see http://www.deccanherald.com (accessed on 16 May 2007)). The two Senators have written letters to the selected firms to determine if the programme is being used for its intended purpose, which is to fill a worker shortage for a temporary time period. The expected responses and the outcome are yet to be seen. Afterwards in June 2007, the two US Senators have alleged that the offshoring firms are also using the L visas14 to circumvent the system. They said Teaneck, New Jersey-based Cognizant Technology Solutions, which has offshore facilities in India, received 2,226 H-1B visas and 3,520 L visas in financial year 2006. The latter figure was up from 1,888 visas the year before. ‘‘It’s clear that the foreign outsourcing firms are abusing the system and we can’t let that continue,’’ added Durbin (see http://www.rediff.com (accessed on 29 June 2007)). Durbin and Grassley have introduced legislation that requires a number of changes in the existing temporary worker programs. The most radical change would be a requirement that companies applying for the visas attempt to hire the US workers first. The legislation would also require

Business Process Outsourcing Under Globalisation

331

companies to pay higher wages to temporary workers and tighten oversight of the visa programs (Elstrom, 2007). ‘‘But resolving differences over the program won’t,’’ as Elstrom 2007 thinks, ‘‘be easy.’’ As he further notes: It’s not as simple as making the H-1B program more restrictive. US tech companies have struggled to bring in enough workers to fill jobs in specialized fields. Even if foreign outsourcers are stopped from using the visas, there will continue to be shortages. This year, the 65,000 annual cap for H-1Bs was filled in less than two daysy. Nor is there an easy distinction between US and non-US firms.

On the Indian front, the United State’s move to seek details from Indian companies on workforce for alleged misuse of H-1B visas was unacceptable to India’s Commerce and Industry Minister, Kamal Nath. He cautioned that this would have an adverse impact on the rapidly expanding services trade. He remarks: I am surprised both with the form and content of the letter. Issues such as work visas are inter-governmental in nature and should be dealt with accordingly. Temporary movement of skilled professionals is an essential component of the global services economy and bears no relation to immigration issues (see http://content.msn.co.in/ News/National. (accessed on 18 May 2007))

During the early June 2007, Sunil Bharti Mittal, president of CII and chairman of Bharti Enterprises, led a delegation to the US. In a meeting with Hillary Clinton, Senator and a Democratic Presidential candidate, he brought to her notice a billion dollar service contract to IBM which is located in her constituency (see http://www.expressindia.com (accessed on 10 June 2007)). In fact, this is one example of the recent trends of ‘‘reverse offshoring’’ in terms of job creation in the US by a number of Indian companies. India’s largest offshoring firm TCS and software giants Infosys and Wipro have been employing laid-off American workers in Indian outfits after training in India. Out of TCS’s 10,000 US-based workers 1,000 are Americans. It also plans to hire an additional 2,000 Americans within 3 years (see http://economictimes.indiatimes.com (accessed on 20 June 2007)). The Indian companies, says BusinessWeek, are recruiting a combination of fresh college graduates and experienced veterans who have worked at American companies. They are especially active at campus job fairs, and unlike a few years ago students know who these companies are and respect them. In fact, the Indian connection has become an attraction (ibid.). The US hiring by the Indians echoes the strategy Japan’s auto industry devised after soaring levels of imports sparked political outcry in Washington in December 2000. ‘‘The Indians are doing to the world’s IT processes what the Japanese did to manufacturing,’’ says analyst John McCarthy of Forrester

332

DILIP DUTTA

Research Inc. (see http://www.rediff.com (accessed on 22 June 2007)). The Indian outsourcers are, however, quoted as saying that their US expansion plans predate the latest concerns over immigration and jobs. But they believe that this trend might ease tensions as the US Senate contemplates over visa restrictions on H-1B and L visas. India’s ITS industry body, NASSCOM, is also making efforts in order to maintain India as world’s favourite outsourcing destination. Very recently, NASSCOM has announced a framework for the ITeS–BPO services firms to adopt ethical practices and corporate governance. The framework has a set of principles to be adhered to by member firms voluntarily. It includes employee-friendly policies, safety and security standards, a code of ethics in hiring, corporate social responsibility, and industry initiatives. Recognising the need for manpower development as the key to growth, NASSCOM also plans to draw up human resource management guidelines in order to attract and retain talent, and address the recent issue of high-attrition. NASSCOM has already introduced an industry standard assessment and certification programme to ensure the transformation of a trainable workforce into an employable workforce. The NASSCOM Assessment of Competence (NAC) will ensure a robust and continuous supply of talent for the industry. The industry body has also set up a National Skills Registry (NSR), a centralised database of employees of the IT services and BPO firms, to verify their credentials with background checks (see http://economictimes.indiatimes. com (accessed on 9 August 2007)). The Innovation Report 2007: Unleashing the Innovative Power of Indian IT–ITeS Industry recently released by NASSCOM and the Boston Consulting Group (BCG) firstly warns that the Indian IT–ITeS industry has to take on the challenges posed by global competition and secondly it must engender innovation both at the firm and industry level. The report addresses three aspects of the innovation agenda – the factors that form a powerful imperative for innovation; the firm level agenda and approach for firms to spur innovation; and finally, recommendations to expand and rev up the innovation ecosystem in India against the benchmarks of international ecosystems like Silicon Valley, Taiwan, Israel, and Eureka (a European network) as perfect examples (see http://economictimes.indiatimes.com (accessed on 3 September 2007)).

CONCLUSION Over the last few years debates on offshoring have resulted in some form of consensus among the leading analysts (ibid. and Subramanyam (2004)).

Business Process Outsourcing Under Globalisation

333

 The practice of using the best and most cost-effective resources to get a job done will not disappear – either voluntarily or by legislation.  India will continue to evolve as a provider of offshoring services, with its universities and educational institutes churning out well-educated English-speaking IT professionals. Rising wages will however erode its competitiveness.  The long-term effect on the US IT job markets in terms of salary reduction will continue due to the pressure arising from competition with offshore vendors. Lower salaries in the US combined with higher wages in offshoring countries will lead to a levelling of the playing field to some extent and an easing of the job crunch for onshore employees.  The average growth rate for offshoring will continue to be about 25% per year over the next few years.  Survival of the favourite outsourcing destination amidst worldwide competition will depend on tapping of untapped opportunities in healthcare, education, financial services, retail, e-governance, etc., which are ripe for low-cost and innovative, IT solutions.

NOTES 1. OECD (2005, p. 5). 2. See Chakraborty and Dutta (2003) and Economic Survey 2001–2002 (Section 7.54). 3. 1 crore ¼ 10 million. 4. Although both ITS and ITeS companies are into the field of ‘‘services,’’ but there is, as Varma (2002) notes, a basic difference in terms of the ‘‘profile’’ of people they recruit. While the ITS companies have built great companies based on human resource (HR) management policies, the ITeS companies’ people management is a 360 degree turn. The ITeS companies need to understand the communities they serve and only with that as the backdrop can they function at all. In contrast, the ITS companies have little or no exposure to the clients they serve. Thus, the profile, behaviour and aspirations of the ITeS employees are totally unlike those of ITS employees. 5. A detail analysis of how the top Indian ICT firms have achieved the international standards can be found in Dutta and Sekhar (2005). 6. BPO contracted outside a company’s own country is sometimes called offshore outsourcing. But BPO contracted to a company’s neighbouring country is often called nearshore outsourcing, while BPO contracted within the company’s own country is usually called onshore outsourcing. 7. National Association of Software and Services Companies (NASSCOM) is India’s quasi-governmental IT industry promotion organization.

334

DILIP DUTTA

8. See Dutta (2007) for a list of competitive pressures and major challenges India’s ITeS–BPO are currently facing. 9. In 1964, the 77 Third World member countries of the United Nations from Africa, Asia, and Latin America had organised a major conference on trade and development. Subsequently the United Nations Conference on Trade and Development (UNCTD) became a permanent organ of the UN General Assembly. 10. Alan Greenspan made this comment while delivering an address via satellite before the British Treasury’s Enterprise Conference in London on 26 January, 2004 (http://economictimes.indiatimes.com accessed on 28 January 2004). 11. Quoted in Engardio (2006). 12. A small scheme of wage insurance was introduced in the US as part of the 2002 trade legislation, but it is limited to older workers who lose manufacturing jobs to foreign imports (Tyson, 2004). 13. Besides Infosys, Wipro, and Tata Consultancy Services, the senators sent letters to Patni Computer Systems, I-Flex Solutions Inc., Satyam Computers, Larsen & Toubro Infotech Ltd., Tech Mahindra Americas Inc., and Mphasis Corp. 14. The L visas, which include the L-1 and other lesser known documents, are used by multinational companies to transfer employees from overseas to offices in the US. These visas do not have some of the restrictions that H-1B visas do, such as the requirement that workers be paid prevailing wages on par with the salaries of American workers. Moreover, while H-1B visas are capped at 65,000 a year, there is no annual limit to the number of L visas. The number of such visas issued has increased from 39,886 in 2001 to 53,144 in 2006.

REFERENCES Amiti, M., & Wei, S. J. (2004). Demystifying outsourcing. Finance and Development, 41(4), 36–39. Bhagwati, J. (1984). Splintering and disembodiment of services in developing nations. The World Economy, 7(2), 133–144. Bhagwati, J. (2004). Why your job isn’t moving to Bangalore. The New York Times, 15 February (accessed from Council on Foreign Relations’ Website: http://www.cfr.org). Chakraborty, C., & Dutta, D. (2003). Indian software industry: Growth patterns, constraints and government initiatives. In: R. Jha (Ed.), Indian economic reforms (pp. 317–333). Hampshire: Palgrave-Macmillan. Dataquest (2002). IT-enabled services: Indian IT’s lone crusader, July 29. www.dqindia.ciol. com/content/dq_top20/2002/102072909.asp Dutta, D. (2007). Role of ICT in development process: A review of issues and prospects in South Asia. In: H. Rahman (Ed.), Information and communication technology for economic and regional developments (pp. 240–258). Hershey: Idea Group Inc. Dutta, D., & Sekhar, A. (2005). Major Indian ICT firms and their approaches towards achieving quality. In: R. Jha (Ed.), Economic growth, economic performance and welfare in South Asia (pp. 225–248). Hampshire: Palgrave-Macmillan. Economic Survey 2001–2002, Government of India, New Delhi, 2002. Economic Survey 2006–2007, Government of India, New Delhi, 2007.

Business Process Outsourcing Under Globalisation

335

Economic Times (2006). IT, ITeS exports soar 33% to $23.6bn in FY06. 2 June (http: economictimes.indiatimes.com/articleshow/1606526.cms). Elstrom, P. (2007). Crackdown on Indian outsourcing firms. BusinessWeek, 15 May (www.businessweek.com/bwdaily/dnflash/content/may2007/db20070515_21811). Engardio, P. (2006). Why outsourcing to India is a great idea. BusinessWeek, 25 January (www.rediff.com/money/2006/jan/25bpo.htm). Hines, M. (2004). Greenspan: Offshoring laws could harm US News.Com., 15 March (http:// www.news.com). Karnik, K. (2004). Editorial. BPO Newsline. National Association of Software and Services Companies (NASSCOM), February. Mankiw, N. G., Forbes, K. J., & Rosen, H. S. (2004). Testimony on the economic report of the President, 10 February. OECD (2005). Potential offshoring of ICT-intensive using occupations. Working Party on the Information Economy, Paris. Parasuram, T. V. (2003). US divided over outsourcing of jobs. Rediff.com, 14 November. Stefanova, B. (2006). The political economy of outsourcing in the European Union and the East-European enlargement. Business and Politics, 8(2), 1–43. Subramanyam, R. (2004). Outsourcing: The leveller. Economic Times, Kolkata, 30 December, p. 5. Tyson, L. (2004). The healing touch. Economic Times, Kolkata, 5 December. Varma, Y. (2002). Of upstarts, or the tired & tested? DataQuest, 18 September (www.dqindia. ciol.com). Verma, P. (2003). US gets the cream from BPO, India the crumbs. Times News Network, 12 September. Wessel, D. & Davis, B. (2007). Pain from free trade spurs second thoughts. The Wall Street Journal Online, 28 March (online.wsj.com/public/article).

Websites: http://content.msn.co.in/News/National http://economictimes.indiatimes.com http://www.deccanherald.com http://www.expressindia.com http://www.rediff.com

This page intentionally left blank

RETROSPECT AND PROSPECT Manas Chatterji and B. M. Jain South Asia, as discussed in the contributions of this volume, is turning out to be ‘‘a most dangerous place’’ in the world, especially in the context of a breeding ground of bloody terror and radical extremism as exemplified by the December 2007 assassination of Pakistan’s former Prime Minister Benazir Bhutto. The region is attracting a wide attention of world chanceries, strategic and security analysts, peace activists and peace economists to rethink the old security doctrines and geopolitical paradigms in a quest for new peace paradigms and security doctrines to address nonmilitary threat perceptions with a view to foster peace and stability in the region. It is hoped that after the recent democratic election when antiMusharraf formed the government, there will be some stability and a reduction of terror attacks. It is yet to be seen. There are many indices, on the basis of which a state’s capacity is judged on delivering the goods to the people. These include human security, internal security, food security, poverty reduction, education and health guarantee, improved infrastructure, societal and communal harmony, protection of minority groups, employment generation and opportunities, and a social security system. Undoubtedly, the intra-regional problems in South Asia are of such a vast magnitude that they demand not only a comprehensive understanding of regional specificities and particularities but also short- and long-term modalities and mechanisms to manage the manifold nature of security threat perceptions and conflicts from a pragmatic perspective. Pitiably, South Asian scholars have failed to understand the deeply entrenched Conflict and Peace in South Asia Contributions to Conflict Management, Peace Economics and Development, Volume 5, 337–347 Copyright r 2008 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1572-8323/doi:10.1016/S1572-8323(08)05021-2

337

338

MANAS CHATTERJI AND B. M. JAIN

complexities of the region from a geopsychological point of view. More pertinently, they need to grapple with the region’s myriad of problems from an integrated perspective. An integrated perspective requires the primacy of diagnosing the dynamics of internal challenges facing the South Asian region in conjunction with complex problems stemming from that of the failure of regimes, whether democratic or military or authoritarian ones, to deliver goods to the people in an era of economic liberalisation. Ruling leaders in South Asia have failed to address the mounting internal problems virtually on all fronts facing each country of the region. In a ‘‘political circus,’’ policy and decision actors are displaying their art of governance through their known rhetorical sloganeering in a highly skilled manner by trying to manipulate the mass psychology in their favour. But it is not cutting ice with them. People are fed up with political slogans. They have garnered enough to demonstrate their disenchantment with ruling leaders’ misgovernance by resorting to street politics. The mass upsurge against policies of their ruling elites is an overt and covert manifestation, as demonstrated in Nepal, Pakistan, and Bangladesh, of their deep-rooted anguish and frustration over the mismatch of promise and performance. This part of the chapter will make a critical survey of the latest developments taking place in the South Asian region in order to analyse the tortuous trajectory of conflicts of a many and varied nature. There is scarcely a single country in South Asia that can claim to be violence and conflict free. Bhutan and the Maldives were identified as the only two countries in the region, which were comparatively free from ethnoreligious conflicts and political violence. But they are also engulfed in conflict of one kind or the other. Bhutan had turned out to be a sanctuary for insurgents from across India’s northeastern states. It was the political will of the governments of both India and Bhutan that they were able to launch a joint operation to flush out insurgents from the Bhutanese soil. This was a classic case of successfully handing the insurgents to be emulated, for instance, by India and Pakistan to tackle militancy in an efficacious manner. Quite recently, the Maldives has become a focal point of terrorist activities. For the first time in the history of the Maldives, Islamist radical elements carried out explosive activities in the Maldives in November 2006. For this, the Gayoom-led government for the last three decade is being held responsible for the rise of Islamist radicalism in the country by promoting Islam as a ‘‘social tool’’ in order to consolidate and perpetuate his own regime. President Gayoom’s own safety and security, like that of Pakistan’s President Pervez Musharraf, is in danger. As reported by the Presidential Office, Presidential Protocol Division, Republic of Maldives

Retrospect and Prospect

339

(Male, 8 January 2008), he was attacked on by a youth with a knife on 8 January 2008, though he escaped unhurt. The political and security situation in Nepal is murky and unpredictable. If one recalls, Nepal has already been reeling under Maoist insurgencies since 1996, killing thousands of innocent civilians. The ruling Seven Party Alliance led by G. P. Koirala of the Nepalese Congress has been facing the toughest time steering clear of the gravitational forces of Maoists and King Gyanendra. The latter has been battling for the survival of the monarchy. He never imagined in his wildest dreams that he would ever be divested of all executive powers. In April 2006, a street demonstration by a mass of Nepalese people clamouring for the end of monarchy and a declaration of Nepal as a republic state ultimately forced the King to retrieve parliamentary democracy. The main demand of the Left Maoist group is to hold elections to the Constituent Assembly to draft a new constitution, under which monarchy will be abolished once for all. However, in a dramatic move the Nepalese parliament passed an interim resolution at the end of year December 2007, to abolish the monarchy and establish Nepal as a republic state. This will have to be ratified by a new Constituent Assembly. The question arises whether the abolition of monarchy and the inauguration of the republic state will put an end to the continuing bloody violence led by Maoists or bring political instability to the country. The current trends show that Nepal is a politically fragmented polity. In the past and over more than one decade, it has been established beyond a shadow of doubt that democracy has not taken strong roots in Nepal, and people have been made hostage to the mutual bickering of political parties. There is a lack of political wisdom on the part of political leaders to find a peaceful and amicable solution to ensure political stability and invest their energies in the economic development and welfare of the people. Unless Maoists abdicate violence forever and work for peace and stability in the country, Nepal will continue indefinitely to be enveloped in bloody political and social violence. It may be remembered that the Nepalese government tabled a resolution in the interim parliament in December 2007 to amend the interim constitution and to hold Constituent Assembly elections by mid April 2008 (Hindu, 2007a–c). They agreed to the declaration of the country as a republic. However, its implementation would be after convening the Constituent Assembly. In fact, the seven party alliance and the Maoists do not have a coherent plan of action to save the country from internal anarchy, political instability, and economic crisis. Even if Nepal were established as a republic state, there is no guarantee that there would be an

340

MANAS CHATTERJI AND B. M. JAIN

end to the bloody violence and an ushering in of political stability and internal peace and harmony in the country. Nepal, once known as a land of peace and harmony, has been transformed into a perpetual perilous state whose societal fabric has been torn into pieces mainly because of the constrained vision of self-serving politicians.

PAKISTAN Pakistan is quite often described as a failing state. Some scholars have described it as a ‘‘failed state.’’ Without indulging into its controversial part, let us see the state of affairs in Pakistan first. Pakistan has been under a mixed spell of military rule and controlled democracy. President Pervez Musharraf has learnt from the legacy of military rule of his predecessors that the best bet to remain in power is to blame democratic leaders for their failure to govern the country in the interest of the people. Musharraf had grabbed power through a bloodless military coup by dislodging the democratically elected government of Nawaz Sharif in October 1999 under a similar alibi. Even after the lapse of more than 8 years of his rule, there has been no change in terms of poverty eradication, economic development, living standards, or internal security. On the contrary, things have taken on a much uglier shape. Michael Krepon writes: ‘‘With or without Musharraf, the corporate interests of the Pakistan Army remain the same: The nation’s well-being now depends on countering internal threats that are carving out autonomous zones in the tribal belt along the Afghan border, in portions of the Northwest Frontier Province, and in mosque complexes in Pakistan’s major cities. Suicide attacks have been carried out against military and political leaders, army commando, air force, and navy complexes. Islamic extremism has devolved from a device used to kick the Soviet Union out of Afghanistan and to inflict pain on India to a clear threat to Pakistan’s future’’ (Krepon, 2007). Musharraf imposed emergency rule in Pakistan on 3 November 2007. He deposed those judges of the Supreme Court he thought were trouble for his survival in power. He ousted Chief Justice Iftikhar Chaudhary – his main adversary – whom he had suspended in March 2007. He feared that Justice Chaudhary, who was later reinstated, would divest him of power since several petitions were lying in the court for a final judgment. There was a loud protest against this unprecedented step throughout the entire country. The legal community and political parties held demonstrations and called

Retrospect and Prospect

341

for an end of the emergency and a restoration of the judiciary. This created a crisis of legitimacy. However, under an intense pressure from the Bush administration, including the Commonwealth of Nations, Musharraf handed over the post of Army Chief he had been holding since October 1999 to General Kayani – his close and trusted confidant. Musharraf also committed to holding the general election (National Assembly and four provincial assemblies) on 8 January 2008, which was further postponed. He also expressed his intent to lift the emergency and revoke the provisional constitutional order before the ensuing elections. Though his main rivals, former prime ministers Benazir Bhutto and Nawaz Sharif, were back in the country after their long political exile. But there is a slim chance that either of them would return to power. India described these developments as ‘‘their internal problem’’ and expressed optimism that things would be back to normalcy. These developments, however, have negatively impacted the ongoing peace dialogue between New Delhi and Islamabad. Besides, the gas line project involving India, Pakistan, and Iran has also suffered. In the murky situation, America has been keeping a close vigil over the regional developments. The Bush administration understands that the deepening political turmoil in Pakistan might adversely affect its ongoing armed operation against Al Qaeda and jihadi elements in Afghanistan and Pakistan as well as concern about the safety and security of Pakistan’s strategic assets. According to Dawn ‘‘US Secretary of Defence Robert Gates has said that the United States can act ‘unilaterally’ to strike at terrorists hiding inside Pakistan’s tribal areas, but has no plans to send troops inside the country. Testifying before the influential House Armed Services Committee on Stability and Security in Afghanistan, Mr. Gates and Chairman of the Joint Chiefs of Staff Admiral Michael Mullen observed that the situation in Pakistan appears to have calmed, freeing troops to focus on fighting the Taliban and Al Qaeda terrorists’’ (Dawn, 2007). On the other hand, Pakistan is seething with ‘‘direct confrontation’’ between Pakistani armed forces and militants in the North West Frontier province. As reported by S. Rahman in his write up titled ‘‘Proxy War,’’ ‘‘It is very unfortunate that very few people understand that the militants at war with the country’s security forces in Swat and adjoining areas are in fact fighting a proxy war for forces inimical to our very existence, the other underlying factor being years long lifestyle of defiance of authority as well as law. Thus, anti-State activities pose a serious threat to internal security to Pakistan. It does not augur well for the regional peace and stability’’ (Nation, 2007).

342

MANAS CHATTERJI AND B. M. JAIN

In a dramatic move, President Musharraf lifted the emergency in the country on 15 December 2007. In his broadcast to the nation, he claimed that his emergency rule, lasting only 42 days, was the shortest period in the history of Pakistan that had experienced the longest emergency rule for 16 years. What will be its implications for the region? The Indian government has welcomed the lifting of the emergency and National Security Adviser M. K. Narayanan’s expressing ‘‘grudging respect’’ for Musharraf. It will bring the composite dialogue between the two countries back on the right track. Second, it will pave the way for strengthening democratic institutions in South Asia and might help to smooth democratic transition elsewhere. But opposition political parties described the lifting of the emergency as mimicry since the deposed judges and two of the lawyers were still under house arrest and restrictions on the media continued. Spokesman of the Pakistan League (N) Nadir Chaudhari described the constitutional changes made by Musharraf before lifting the emergency as a ‘‘one-man law factory’’ (Hindu, 2007b). Musharraf, however, has assured the nation that the democratic process to begin in the early 2008 would ensure free and far elections. But the people of Pakistan still doubt his credentials in this regard. In the meantime, Pakistan has once again turned out to be a hotspot of the worst terror following the assassination of Benazir Bhutto on 27 December 2007 when she was returning from addressing an election rally held in Rawalpindi. This has sent shock waves throughout the world, condemning the dastardly act of cowardice by terrorists. It was a grievous jolt to the democratic process in Pakistan. Furthermore, it proved that the Taliban phenomenon is not confined to the Middle East. It not only has shifted to Pakistan but also has strengthened its roots in the North West Frontier Agency Province that has become a main citadel of Taliban and Al Qaeda elements. Political parties in India have described the assassination of Benazir Bhutto as a ‘‘negation of democracy’’ and confirming the ‘‘Talibization of Pakistan,’’ in L. K. Advani’s opinion (Hindu, 2007c). Former Prime Minister A. B. Vajpayee described her killing as a ‘‘big challenge for democracy and peace.’’ The greatest threat to Pakistan, whether led by Musharraf or any other leader, is the growing influence of the indigenous Taliban and jihadi elements that dare to carry out terrorist acts at will. This will also have a deep spill-over effect on India, which has continued to remain a central target of hardcore militants. In these circumstances, both India and Pakistan need to work out a joint and well coordinated strategy to stamp out terrorism from their soil without entertaining past prejudices towards one another. For Pakistan, internal jihadis are the greatest single

Retrospect and Prospect

343

threat to internal security, political stability, and economic development. Indeed, symptoms are clearly visible that Pakistan is heading towards becoming a ‘‘failed state.’’ As regards the Bush administration, it has been keeping a close watch over political developments in Pakistan following the assassination of Benazir Bhutto as reported in The News (4 January 2008): The United States has contacted Nawaz Sharif in its bid to review its options and to have close relations with Pakistani leaders after the assassination of Benazir Bhutto, sources close to the PML-N leader confirmed to The News on Thursday. The United States will now bank on Nawaz Sharif after the assassination of Benazir Bhutto, its supporter on the war on terror, and establish close contacts with him as he is the main opposition leader after the PPP chairperson, a leading US news agency reported earlier on Thursday. Elizabeth Colton, the US embassy spokesperson, confirmed to The News that the US Consul General in Lahore Brine Hunt was meeting Nawaz Sharif and Shahbaz Sharif today.1

According to Dawn (4 January 2008), President Bush in an interview with a western news agency said, ‘‘It’s in the interest of the world to help Pakistan recover from this terrible incident and have a strong democracy, that’s exactly what the position of the US government is.’’ Bush also made it obvious that his administration still considers President Pervez Musharraf a strong ally in the war against terror and wants to continue to work with him.2 The Economist (3 January 2008) in its piece entitled - Pakistan: The world’s most dangerous place - argues, That terrorists could strike in Rawalpindi, headquarters of the Pakistani army, despite having advertised threats against Miss Bhutto, and despite the slaughter of some 150 people in Karachi on the day she returned from exile last October, suggests no one is safe. If, as many in Pakistan believe, the security services were themselves complicit, that is perhaps even scarier. It would make it even harder to deal with the country’s many other fissures: the sectarian divide between Sunni and Shia Muslims; the ethnic tensions between Punjabis, Sindhis, Pushtuns, and ‘‘mohajir’’ immigrants from India; the insurgency in Baluchistan; and the spread of the ‘‘Pakistani Taliban’’ out of the border tribal areas into the heartlands.3

In brief, Pakistan is wading through an unprecedented predicament in the aftermath of Benazir Bhutto’s assassination. It is a high time for Gen. (retired) Musharraf to reflect over how to save the country from the internal chaos and anarchy. Being a nuclear state, Pakistan’s dilemmas are further accentuated as to how to keep the country’s internal security intact on the one hand and to ensure the safety and absolute security of strategic assets against the impending threats of Taliban and jihadi elements on the other.

344

MANAS CHATTERJI AND B. M. JAIN

Given these speculations, Pakistani government has made it known to world chanceries, its neighbours, and its own people that there was no need to be panicky over the safety of nuclear weapons. In this scenario, India should also be on an extraordinary alert that its internal security is further tightened in the wake of incremental threats from jihadi and radical groups. India’s nebulous security arrangement, despite the repeated warning from the intelligence agencies, is a cause of grave concern to the Indian people.

SRI LANKA Sri Lanka continues to be a hotbed of armed conflict between the LTTE and Sri Lankan armed forces. Colombo has experienced the worst bloody conflict since 1983, taking a toll of over 70,000 people since then. All efforts towards peace and reconciliation have failed miserably. The Norwegianbrokered Cease Fire Agreement of 2002 has not produced peace in Sri Lanka. There has been an escalation of conflict due to the extensive military operations by Sri Lankan armed forces in the northern region, challenging the military prowess of V. Prabhakaran, the supreme LTTE. The killing of the Tamil Tiger political wing leader S. P. Thamilchelvan in Kilinochchi by Sri Lankan forces in November 2007 sent shock waves throughout the entire LTTE cadre. Whereas, Sri Lankan President Mahinda Rajapaksa has been reaffirming his resolve to fight the LTTE to the finish on the one hand and talking of ‘‘honorable’’ peace on the other. But the government rejoiced over the death of Thamilchelvan, a right hand of Prabhakaran. His death has further contributed to accentuating violence and bloodshed in the country. A moot question arises of how the formula of federal government can work in order to end the conflict once for all. The question is linked to the mindset of Sri Lankan ruling leaders. President Mahinda Rajapaksa has made it clear that he is opposed to the introduction of the federal structure as a lasting solution to the ethnic conflict in Sri Lanka. The international community has failed to find out any honourable solution to the problem. Nor have major powers including India succeeded in bringing the ethnic conflict to an end. It seems that the end of conflict is not in sight in the near future. On the other hand, humanitarian agencies have deplored the fact that armed groups have made it difficult for them to implement shelter activities since the shelter material is being looted by armed groups.

345

Retrospect and Prospect

Another dimension of the ethnic conflict is the security and rehabilitation of Sri Lankan Muslims who were driven out of Jaffna by the LTTE in 1990 in one of its worst acts of ethnic cleansing (Hindu, 2008a, b). The problem has been further complicated due to discrimination practised against them by the Sri Lankan government. This is evident from the resignation of three Muslim ministers from the government in December 2007 in protest against the government’s discriminatory policies against Sri Lankan Muslims. The nebulous peace process got a further setback with the Sri Lankan government’s decision to terminate the 2002 Cease-fire Agreement. The UN Secretary-General Ban Ki-Moon has regretted the decision. The spokesperson for UN Secretary-General Ban Ki-Moon issued a statement on 3 January 2008 that reads, The Secretary-General regrets the decision made by the Government of Sri Lanka to terminate the 2002 Cease-fire Agreement with the Liberation Tigers of Tamil Eelam (LTTE). He is deeply worried that the withdrawal from the Agreement comes amidst intensifying fighting in the north and increasing violence across the country, including Colombo. The Secretary-General urges all concerned to ensure the protection of civilians and enable humanitarian assistance to be provided to affected areas. He underlines the urgent need to end the bloodshed in Sri Lanka through a political solution.4

But President Rajapaksa is alleged to be determined to stamp out LTTE. After the killing of Minister of Rehabilitation D. M. Dassanayake in a road blast by LTTE on 8 January 2008, Rajapaksa said that rehabilitation work in the Eastern Province, liberated from the LTTE’s stronghold, was an eyesore to LTTE. The latter’s aim, he asserted, was to obstruct the peace process. Rajapaksa emphasised that it was ‘‘another example of the LTTE’s continued commitment to terror and violence to achieve its separatist goals, and absolute contempt and disregard for human values and the policies and practice of democracy’’ (Hindu, 2008b). The Norwegian-brokered peace has suffered a grievous setback. While making the use of soft power at the core of peaceful settlement, Sri Lankan government needs to continue the dialogue with LTTE and to seek the cooperation of the people to find a lasting peaceful solution. The use of hard power is a not an ultimate solution to resolve the ethnic conflict in Sri Lanka.

BHUTAN Bhutan is also heading towards democracy peacefully. For the first time in the history of its monarchical regime in over a century, the people of Bhutan

346

MANAS CHATTERJI AND B. M. JAIN

participated in the democratic process to elect 120 members of the upper house known as the National Council on 31 December 2007. It is a welcome change. Interestingly, unlike the Nepalese, the Bhutanese had no complaint against their benign monarchy. In fact, the Bhutanese monarch sensed the democratic wave blowing across the world and thought it wise to allow the democratic system to take root in the country so that the people can be direct participants in the development process and governance. What makes Bhutan a unique country in South Asia is that a candidate contesting election to the National council must be a graduate. This is an ideal example for other democracies, especially for the largest democracy India, to follow so that qualified and deserving people are attracted to politics. In brief, the South Asian will continue to face non-military threats unless cooperative security planning is mooted and implemented at the regional level. Mounting challenges of militancy, insurgency, cyber crime, narco terrorism, illegal migration, human trafficking, avian influenza in India (suffered thrice till January 2008) and Bangladesh, and environmental degradation cannot be tackled by a single country on its own. Militants and mafias are taking full advantage of the mismatched policy of the national elites of South Asia who, they think, are unable to undertake a concrete action plan jointly to curb and control them. On the contrary, they are vigorously regrouping in a well coordinated and concerted manner in order to deal with any challenge stemming from the state’s military and paramilitary forces. Taliban and Al Qaeda elements have already regrouped in Afghanistan and across the northwestern tribal areas of Pakistan, especially in South Waziristan where the Al Qaeda has a stronghold. Pakistan virtually has been found helpless and hapless so far to deal with them effectively. As a result, internal security has become hostage to these forces; political stability is in jeopardy due to political squabbles among power-hungry political parties. There is a kind of leadership vacuum in the region. There is hardly a visionary and effective political leader in the region capable of taking a broader and more integrated perspective of the regional peace, security, and stability. The overarching reason for this moribund state of affairs is the constrained vision of self-seeking ruling and political leaders of the region. Already, the time is passing quite quickly for the imperative of catching up with the spirit of regional cooperation and interdependence for internal security and political stability in the region. They need to realise the stark fact that their destinies are bound together. Insecurity in one country will have a spill-over effect on the other. Considerable changes have taken place

347

Retrospect and Prospect

after the papers in this volume were written. We hope to bring forward another up-to-date volume on the subject sometime in the future. Economic miracles, knowledge of society, and knowledge of economy have no relevance unless physical security, human security, and a society free of violence and bloodshed are ensured against the gargantuan and open challenge by extremists and ‘‘global jihadis’’ who are reasserting their unbounded invisible power and authority over the rest of the world. Despite these handicaps and constraints, peace activists and civilian intervention and media have a crucial role in producing conditions of peace in the region. In recent months, a considerable number of changes in the political scene of the South Asian countries have taken place like US–India Nuclear deal approval by Indian Lok Sabha in spite of opposition by CP(M), terrorist attacks in India, riots in Kashmir, resignation of Musharraf, internal fight in ruling coalition in Pakistan, Taliban terrorism in Pakistan border, changes in US–India–Pakistan relations, SARC meeting in Sri Lanka, natural disaster in Myanmar, and its politics, formation of government in Nepal, etc. We hope in a future book or a revised edition of this book, to discuss these matters in full detail.

NOTES 1. 2. 3. 4.

Source: IPCS NEWS ALERT, New Delhi. Source: IPCS NEWS ALERT, New Delhi. http://www.economist.com/opinion/displaystory.cfm?story_id ¼ 10430237 Source: UNIC/PRESS RELEASE/02-2008, 4 January 2008.

REFERENCES Krepon, M. (2007, 20 November). Pakistan with or without Musharraf. http://www.stimson. org/pub.cfm?id ¼ 484. Dawn, December 13, 2007. The Hindu, December 16, 2007a. The Hindu, December 16, 2007b, p. 16. The Hindu, December 28, 2007c, p. 1. The Hindu, January 9, 2008a, p. 10. The Hindu, January 9, 2008b, p. 10. The Nation, December 12, 2007.

This page intentionally left blank

INDEX Assembly elections, in West Bengal in 1967, 34–37 strength of parties in, 35 in 1972, 38 mid-term election in 1969, 37–38 9/11 attacks on US, 14

Advani, L. K., on outsourcing, 323 Afghanistan. see also India-Afghanistan relations Jama’at-i-Islami of Pakistan in jihad in, 259–260 South Asian Association of Regional Cooperation (SAARC) membership to, 189–190 Soviet Union’s military invasion over Afghanistan in December 1979, 11–12 wheat aid to, 189 Zaranj-Delaram road in, 187, 188–189 African Growth and Opportunity Act 2000 (AGOA), 111 AGOA. see African Growth and Opportunity Act 2000 (AGOA) Agriculture, liberalization, 301 Ahmad, Mirza Ghulam, 257 Ahmadis, 257–258 Ahmed, Qazi Hussain, 259 Ahrar, 257 al Jihad fil Islam, 251 Amman, Karuna, 160. see also Liberation Tigers of Tamil Eelam (LTTE), conflict within the group Annan, Kofi, on water, 270 Arbatov, Alexei, on nuclear proliferation, 88–89 Article XXI, of GATT, 306–307, 308–310, 311 ASEAN Regional Forum (ARF), 97

Bandaranaike, Sirimavo, 134 Bandaranaike, Solomon, 128 on language policy, 129 and SFLP, 128–129 Bandaranaike-Chelvanayakam Pact (B–C Pact), 131–132 Bangla Congress, 32 Bangladesh and China, 234–235 civil war in, 9–10 cyclones in, 85 and Pakistan, 234 and relations with India. see IndiaBangladesh relations Simla Agreement, 10 trade with India tariff and nontariff barriers, 288–289 trade imbalance, 287–288 Banna, Hasan al, 252 Barelvi, Sayyid Ahmad, 254 Bhagwati, Jagdish, on outsourcing, 321–322, 327 Bharatiya Janata Party (BJP), 233, 238 Bhattarai, K. P, 218

349

350 Bhutan, 338 democracy in, 345–346 trade with India, 289–290 Bhutto, Benazir, 341 assassination of, 337, 342–343 Bhutto, Zulfikar Ali, 9, 10, 258 death, 259 Bilateral initiatives, India-Afghanistan relations, 187–188 Bilateral issues, India-Bangladesh relations Islamic fundamentalism, 240–242 migration, 239–240 water concerns, 238 weak economic ties, 242–244 Blaustein, Albert P., 206 Blinder, Alan S., 329 Bonn agreement of 2001, 187 Bottled water industry, 270 British Standards Institute, 320 Brzezinski, Zbigniew, 205 BS 7799, 320 Business process outsourcing (BPO), in India, 315–316. see also Outsourcing backlash issues, 320 back-office processing, 319 FICCI on backlash of, 320 and H-1B visa, 323, 330–331 ISO standards, 318 political debate, 320–324 UNCTAD on, 320 and unemployment in US, 316, 325–326 CBM. see Confidence building measures (CBMs), and nuclear proliferation Ceasefire agreement (CFA), in Sri Lanka, 150, 156 SLLM in, 156–157 Ceylon Workers’ Congress (CWC), 135 CFA. see Ceasefire agreement (CFA), in Sri Lanka

INDEX Chand, Lokendra Bahadur, 219 Chaudhary, Iftikhar, 340 Chelvanayakam, S. J. V., 134–135 China and Bangladesh, 234–235 and India, 8–9 Chukha Hydroelectric project, 279 Cirincione, Joseph, 98 Civil society, in Sri Lanka, 149 colonialism and, 151–152 Civil war, in Bangladesh, 9–10 Clary, Christopher, on nuclear proliferation, 89 ‘‘clash of civilizations’’, theory, 90 Coalition politics, in West Bengal. see West Bengal, political condition Cohesive nation-state, 73 Cointegration methods, Indo-Pak military expenditures linear cointegration. see Linear cointegration nonlinear cointegration data and results, 51–54 methodology, 49–51 Cold War, 1 and India-Afghanistan relations, 186 Colebrook–Cameron Commission, 127 Communist party Marxist-Leninist (CP (ML)) Communist Party (ML), in Nepal, 3 Communist Party of India (CP (I)), 32. see also People’s United Left Front (PULF) ideology, 34 Communist Party of India-Marxist (CP (M)), 33. see also United Left Front (PULF) ideology, 34 and Naxalities, 37 Comprehensive Test Ban Treaty (CTBT), 12–13 Confederation of Indian Industries (CII), 324

Index Confidence building measures (CBMs), and nuclear proliferation, 94–95 Conflict resolution, concept of, 214–215 Conflict transformation, concept of, 215 Congress party, in West Bengal, 32 in election of 1969, 34–35 Conquest, Robert, 206 Conservative fundamentalism, 250 Constituent Assembly of a Republican Constitution, in Nepal, 216 Constitution, in Sri Lanka, 135 amendment (1987) to, 137 Convention on the Law of the Non-Navigational Uses of International Watercourses, 273 Copenhagen School, on securitisation, 2–3 Coup, in Mayanmar. see Military coup, in Mayanmar Critical infrastructure, defined, 78 Cross-border pipeline trade, 310–311 Cyclones. see also Natural disasters in Bangladesh, 85 in India, 84–85 Danube basin, water cooperation in, 276 dar ul harb, 257 Dassanayake, D. M., killing, 345 Decentralisation theorem, 62 Defence budget, of Sri Lanka, 174, 180. see also Defence expenditures, in Sri Lanka Defence Cooperation Agreement, 234–235 Defence expenditures, in Sri Lanka, 173–174 data on, 174 defence budget, 174, 180 deflection of foreign aid, 174–175 and GDP, 176–177 and labour-intensive military strategy, 180–182 military hospitals, 175

351 and other South Asian nations, 177–179 and rebel groups, 175 vs. social expenditure, 175–176 Democracy, theoretical perspectives of, 204–206 Democratic Republic of Korea (DPRK), 97 Democratisation, 57–58 Deoband, 254 Desai, Morarji, on nuclear tests, 11 de Silva, Colvin R., 134 Directorate General of Technical Development (DGTD), 60 Disaster management, 76–77. see also Natural disasters Dissanayake, Gamini, 162 Dodd, Chris, on outsourcing, 321 Doha Development Agenda, 301 Domestic politics, and IndiaBangladesh relations, 235–238 DPRK. see Democratic Republic of Korea (DPRK) Dueba, Sher Bahadur, 218 Durbin, Richard, on H-1 B visa program, 330–331 Earthquake, in Kashmir, 80 effect of, 82 East Pakistan. see Bangladesh Economic policy management, in Sri Lanka, 111–112 Economic ties, India-Bangladesh relations, 242–244 Economy, of Sri Lanka. see also MBA programmes, in Sri Lanka economic policy management, 111–112 entrepreneurial management, 112 export, 111 foreign investment, 112 garment industry, 111 negative growth rate, 110

352 Education sector, Sri Lanka, 113 Eelam People’s Democratic Party (EPDP), 161, 162 Elbardei, Mohmamed, on nuclear proliferation, 87 Elections, in Sri Lanka, 150–151 general, 2004, 162–163 Energy security, 302–304 Engagement policy, of US, 13–14 Vision Paper, 13 Engardio, P., on outsourcing, 328–329 Environmental degradation, 75 Equitable distribution, of water, 273 Ethnic conflict, in Sri Lanka, 149–150. see also Liberation Tigers of Tamil Eelam (LTTE) Ethnicity distribution, Sri Lanka, 107 Ethno-religious conflicts, 4–5 European Union (EU), on water management, 276. see also EU Water Framework Directives (EUWFD) EU Water Framework Directive (EUWFD), 276–277 Export controls in WTO, 304–308 and Article XXI, 311–312 in Sri Lanka, 111 Federal Party (FP), in Sri Lanka, 130 Floods, in Mumbai, 79–80. see also Natural disasters Food grains, 302 Food security, 301–302 Forbes, on outsourcing, 322 Ford, Gerald, 10 Foreign direct investment (FDI), 317 Foreign Exchange and Regulation Act (FERA) of 1973, 61 Forrester research, on outsourcing, 325

INDEX Fundamentalism. see also Islamic fundamentalism conservative, 250 radical, 250 terminology, 249 Galtung, Jon, 2 Gandhi, Indira, 9–10, 32. see also Congress party Ganges River Water-Sharing Agreement, 1996, 278 Garment industry, in Sri Lanka, 111 GATS. see General Agreement on Trade in Services (GATS) GATT. see General Agreements on Tariffs and Trade (GATT) General Agreement on Trade in Services (GATS), 320 General Agreements on Tariffs and Trade (GATT) Article XXI, 306–307, 308–310, 311 basic principles, 299–300 export controls. see Export controls, in WTO inception of, 299 MFN, 300 India and Pakistan, 311–312 General Electric (GE), in India, 318 Geographical boundaries, of India, 20, 21 Gerakan Aceh Merdeka (GAM), 83 Globalisation, 315 Global security, threats to, 74 Global trade, 300–301. see also General Agreements on Tariffs and Trade (GATT); World Trade Organization (WTO) Global Water Partnership (GWP), 272 Government India Act of 1935, 59 Grassley, Charles, on H-1B visa, 330–331 Gunasinghe, Newton, 128 Harkat ul Jihad-i-Islami (HUJI), 261 Harriman, Averell, 8

Index Harriman team, for Kashmir issue, 8–9 H-1B visas, US, 323 legislation to change, 330–331 Helms-Burton Act. see US Cuban Liberty and Democratic Solidarity Act of 1996 ‘‘Hindu Bomb’’, 91 Hindu–Muslim syndrome, 89 ‘‘holy war,’’ 90 Horowitz, Donald, 133 Human rights violations in Myanmar, 208–210 in Sri Lanka, 163 Human Rights Watch (HRW), 162 Hurricane Katrina, 80. see also Natural disasters Identity theft, in US, 319 ILFTA. see Indo-Lanka Free Trade Agreement (ILFTA) Import Trade Control Order of 1955, 60 India and Afghanistan. see India-Afghanistan relations and Bangladesh. see India-Bangladesh relations British rule and, 20–21 cyclones in, 84–85 division of, 21 energy requirements of, 302–303 geographical boundaries, 20, 21 IPR. see Industrial Policy Resolution (IPR), in India LPGs. see Local public goods (LPGs), in India MFN status, 311–312 military expenditure in, 21–23 nuclear detonation in Pokhran, 10–11 nuclear proliferation in. see IndiaPakistan, nuclear proliferation and and oil import, 303 and peace process in Nepal, 224–226 population, 21

353 Simla Agreement, 10–11 trade with neighbouring countries. see Trade, of India US outsourcing to India. see Business process outsourcing (BPO) war with Pakistan, 9, 10 and WTO on food security, 301–302 India-Afghanistan relations bilateral initiatives in, 187–188 Bonn agreement of 2001, 187 Central Asia and, 196–198 diplomatic visits, 188 infrastructure projects, 188–189 Islamic extremism, 194–196 military assistance, 188 and Pakistan, 190–193 Preferential Trade Agreement, 189 regional influence, 198–199 SAARC membership, 189–190 setting institutional capacity, 189 technical and economic cooperation, 188 wheat aid, 189 India-Bangladesh relations addressal of mutual problems, 233 bilateral issues. see Bilateral issues, India-Bangladesh relations domestic politics, 235–238 geographical boundaries, 233–234 historical background, 232–233 Indian concern over food security, 301–302 India-Pakistan, nuclear proliferation and, 89–90 nuclear deterrence, 91–92 nuclear tests, 90–91 Individual Dignity Entitlement Programme, 109 Indo-Lanka Accord, 137–138 Indo-Lanka Free Trade Agreement (ILFTA), 292, 293 Indo-Pakistan War, 1965, 9 Indo-Pakistan War, 1971, 10

354 Indus Treaty in 1960, 277–278 Industrial Policy Resolution (IPR), in India of 1948, 60 of 1955, 60 Industries (Development and Regulations) Act in 1951, 60 information and communication technology (ICT), 315 Information Technology Association of America (ITAA), on outsourcing, 325 information technology services (ITS), 315. see also Business process outsourcing, in India Innovation Report 2007: Unleashing the Innovative Power of Indian IT–ITeS Industry, The, 332 Inter-Asian regional nuclear collaboration, 88 International aid, to Sri Lanka, 106 International Law Association (ILA), 273 International Law Commission (ILC), 273 International Monetary Fund’s (IMF), 317 International theorists of power and hegemon, 2 Inter Services Intelligence (ISI), 3 intra-regional problems, 337–338 Iran, nuclear proliferation in, 96 Iraq war, 15–16 ‘‘Islamic Bomb’’, 91 Islamic extremism, 194–196 Islamic fundamentalism Ahmad, Mirza Ghulam, 257 Ahmed, Qazi Hussain, 259 Ayatollah, Khomeini, 253–254 contemporary, 250 and India-Bangladesh relations, 240–242

INDEX Jama’at-i-Islami Bangladesh, 260–261 Jama’at-i-Islami Hind, 261–263 Jama’at-i-Islami of Pakistan, 259–260 Jamiatul-Ulama-i-Hind, 254–255 Jamiatul-Ulama-i-Islam, 255 Jamiatul Ulama-i-Pakistan, 255 Madani, Maulana Hussain Ahmed, 255–256 in Maldives, 338–339 Maududi, Mawlana Abul Ala. see Maududi, Mawlana Abul Ala MMA, 260 Nadvi, Mawlana Abul Lais, 261 Qutb, Syed, 252–253 terminology, 249–250 Wahab, Abdul, 250 Waliullah, Shah, 249–250 Ismail, Ranzil, 207 IT Act 2000, India, 319 IT-enabled services (ITeS), in India, 315–316. see also Business process outsourcing (BPO), in India ISO standards, 318 IT Act 2000, 319 Karnik, Kiran, 319 NASSCOM on, 319 network security issues, 319–320 outlocation services, 318 people-intensive services, 318 Jama’at-i-Islami Bangladesh, 260–261 Jama’at-i-Islami Hind, 261–263 Maududi’s guidelines to workers of, 261–262 and RSSS, 262 Jama’at-i-Islami of Pakistan in jihad in Afghanistan, 259–260 Jamiatul-Ulama-i-Hind, 254–255 Jamiatul-Ulama-i-Islam, 255 Jamiatul Ulama-i-Pakistan, 255 Jayewardene, J. R., 135

Index Jayewardene, Junius Richard, 132 promulgation of new constitution in 1978, 135 and Tamil violence, 136 Jihad, 90, 252 Joint Counter-Terrorism Committee, 13 Kagan, Robert, 205 Kandyan Kingdom, 127 Kant, Immanuel, 206 Karnik, Kiran, on ITeS-BPO market in India, 319 Karzai, Hamid, 191 visit to India, 185 Kashmir earthquake, 80 Kaushalyan, E., 161 Kennedy, John F., 8–9 Kerry, John, on outsourcing, 321 Keynesian economic theory, 173 Khan, A. Q., 89 Khan, Yahya, 10 Khomeini, Ayatollah, 253–254 Ki-Moon, Ban, on Sri Lanka, 345 Kodithuwakku, Karunasena, 108 Koirala, G. P., 339 Kolkata. see West Bengal Kumaratunga, Chandrika Bandaranaiyake, 107 Kumaraya, Sapumal, 127 Kunming Initiative, 235 Kurichhu Hydroelectric Project, 279 Kyi, Suu, 206, 208. see also National League for Democracy (NLD) Labour cost, in Sri Lanka, 181–182 Labour-intensive military strategy, in Sri Lanka, 180–182. see also Defence expenditures, in Sri Lanka Labour movement, in Sri Lanka, 152–153 Language policy, in Sri Lanka, 129–131 Lanka Sama Samaja Party (LSSP), 134 Latin American Tlatelolco Treaty of 1967, 95

355 Liberalisation in India, 59–62 trade, 301 Liberation Tigers of Tamil Eelam (LTTE), 83, 344–345 in ceasefire, 156 SLLM, 156–157 conflict within the group, 159–161 and government forces, 158, 159 in human rights violations, 163 and other Tamil groups, 161–163 Life expectancy, in Sri Lanka, 181 Linear cointegration methods, 48 Literacy rates, in Sri Lanka, 110 Local public goods (LPGs), 58 decentralisation theorem and, 62 disequilibrium in, 63 median voter model, 62 urban model in India for. see Urban LPGs, in India LPG. see Local public goods (LPGs) LTTE. see Liberation Tigers of Tamil Eelam (LTTE) Madani, Maulana Hussain Ahmed, 255–256 mahajana sabhas, in Sri Lanka, 152 Mahakali Treaty, 279 Mahalanobis Committee (1964), 60–61 Mahavamsa, 126 Majlise Ahrar, 257 Maldives, Islamic fundamentalism in, 338–339 Mankiw, N. Gregory, on outsourcing, 321 Mann, Catherine, on outsourcing, 328 Maoist movement, in Nepal, 339–340 overview, 215 peace negotiations, 218–220 failure of, 220–222 first round of, 218–219 second round, 219–220

356 political agenda of, 216 social crisis and, 217 socio-economic agenda of, 216 strategies to combat, 222–224 bilateral negotiations, 224 democratic means in, 223 international mediation, 223–224 use of force, 222–223 Martial Law, in Lahore, 257 Matsuura, Koichiro, 270 Maududi, Mawlana Abul Ala, 251–252 on demand of Pakistan, 256 ideology, 251 on Islamic Constitution, 256–257 and Jama’at workers in India, 261–262 on jihad, 252 and modern Islam, 255 on secularism, 262 Mayanmar human rights violations in, 208–210 independence of, 206 military coup in, 206 military government in, 206–208 NLD, 207 political prisioners, 207, 208 Rohingyas in, 209–210 SPDC, 207 UN’s role in setting democracy in, 207–208 MBA programmes, in Sri Lanka, 113–119 in building nation, 119–122 McCarthy, John, on job loss in US, 322 McKinsey Global Institute research, on outsourcing, 327 Media, and outsourcing, 322 MFN. see Most-favoured-nation (MFN), under GATT Migration, and India-Bangladesh relations, 239–240 Migration issue, in India-Bangladesh relations, 239–240

INDEX military assistance, India-Afghanistan relations, 188 Military coup, in Mayanmar, 206 Military expenditures. see also Cointegration methods of India, 21–23 in Pakistan, 24–29 east and west feud and, 24 grievances and, 24–25 of Pakistan, 24–29 in Sri Lanka. see Defence expenditures, in Sri Lanka Military government, in Mayanmar, 206–207 human rights violations, 208–210 peace talks with, 207–208 Military hospitals, in Sri Lanka, 175 Military strategy, in Sri Lanka, 180–182. see also Defence expenditures, in Sri Lanka Missile defence programme, in US, 88 Missile Technology Control Regime (MTCR), 98–99 Mobility, of residents, 63 Monopoly and Restrictive Trade Practices Act (MRP) of 1969, 61 Moral standards, and nuclear proliferation, 93–94 Most-favoured-nation (MFN), under GATT, 300 India and Pakistan, 311–312 Motorola, in Sri Lanka, 109 MTCR. see Missile Technology Control Regime (MTCR) Mukherjee, Ajoy, 32, 35 Mumbai floods, 79–80 government and, 81 Musharraf, Pervez, 260 comments on Khan, A. Q., 89 and emergency rule, 340–341 lifting, 342 visit to Bangladesh, 234 and ‘‘war on terrorism,’’ 191

Index Muslim Family Laws Ordinance, 258 Muslims, in Sri Lanka, 133–134 Muttahida Majlis-e-Amal (MMA), 260 Nadvi, Mawlana Abul Lais, 261 Najibullah, Mohammad, 186 NASSCOM on outsourcing, 319, 320, 325, 332 Nath, Kamal, on H-1B visa program, 331 National League for Democracy (NLD), 207 Nation-state building, theory, 73 Natural disasters costs of, 79 critical infrastructure and, 78–79 inter-and intrastate conflicts, 76 risk variation, 78 scenario, 83–85 technical solutions to, 78 Natural Resource Defense Council, US, 269–270 Naxalities, in West Bengal and CP (ML), 35, 36–37 Nazimuddin, Khwaja, 257 Nepal conflict in. see Maoist movement, in Nepal Constituent Assembly of a Republican Constitution, 216 maoist movement in. see Maoist movement, in Nepal peace process in India and, 224–226 US and, 226–228 social crisis in. see Maoist movement, in Nepal trade with India, 290–291 New Economic Policy, 1985–1986, 62 New Orleans, hurricane in, 80, 81 social condition, 82 Non-Aligned Movement, 186

357 Nonlinear cointegration, Indo-Pak military expenditures data and results, 51–54 methodology, 49–51 Nonmilitary threats defined, 74 natural disasters. see Natural disasters vs. military threats, 77 Non-NATO Military Ally (NNMA), 7 Non-proliferation treaty (NPT), 87 North Korea, nuclear crisis in, 96–98 DPRK’s resolution demands, 97 NPT. see Non-proliferation treaty (NPT) Nuclear deal, of India, 31 Nuclear deterrence, 91–93 Nuclear detonation, by India, 10–11 Nuclear Non-Proliferation Act (NNPA), 1978, 11 Nuclear proliferation Arbatov, Alexei on, 88–89 CBMs, 94–95 Cirincione, Joseph on, 98 Clary, Christopher on, 89 Elbardei, Mohmamed on, 87 in India. see India-Pakistan, nuclear proliferation in Iran, 96 missile defence programme in US, 88 moral standards and, 93–94 MTCR, 98–99 in North Korea. see North Korea, nuclear crisis NPT, 87 NWFZ. see Nuclear weapon free zone (NWFZ) strategy in Pakistan. see India-Pakistan, nuclear proliferation Nuclear Suppliers Group (NSG), 98 Nuclear weapon free zone (NWFZ) strategy, 95–98 dilemma of, 96

358 North Korea nuclear crisis, 96–98 DPRK’s resolution demands, 97 treaties for, 95 Nuclear weapons tests, 3, 7 NWFZ. see Nuclear weapon free zone (NWFZ) strategy Nyunt, Khin, 207 Official Language Act, in Sri Lanka, 129 Oil import, of India, 303 Outsourcing, 316–317. see also Business process outsourcing (BPO) Advani, L. K. on, 323 Bhagwati, Jagdish on, 321–322, 327 Blinder, Alan S. on, 329 Dodd, Chris on, 321 economists’ views on, 325–329 Engardio, P. on, 328–329 Forbes on, 322 Forrester research on, 325 H-1B visa and, 323, 330–331 ITAA on, 325 Kerry, John on, 321 Mankiw, N. Gregory on, 321 Mann, Catherine on, 328 McKinsey Global Institute research, 327 media and, 322 NASSCOM, 319, 320, 325, 332 political debates on, 318–324 forward looking approach, 330–332 and unemployment, 325–326 Pakistan, 20–21, 340–344 and Bangladesh, 234 Bhutto, Benazir. see Bhutto, Benazir Bhutto, Zulfikar Ali, 9, 10, 258 death, 259 emergency rule in, 340–341 Michael, Krepon on, 340 military expenditure in, 24–29 east and west feud and, 24 grievances and, 24–25

INDEX Musharraf, Pervez. see Musharraf, Pervez nuclear proliferation in. see IndiaPakistan, nuclear proliferation and Pressler Amendment on, 12 Sharif, Nawaz. see Sharif, Nawaz Simla Agreement, 10 trade with India, 291–292 1965 war, 9 1971 war, 10 Pakistan Peoples Party (PPP), 260 Parajuli, Umesh, on Mahakali Treaty, 279–280 Parakramabahu VI, 126–127 Pararajasekaram, 127 Peace, concept of, 214 Peace negotiations concept of, 214 with maoists in Nepal failure of, 220–222 first round of, 218–219 second round of, 219–220 People’s United Left Front (PULF) in Assembly elections of 1967, 34 in mid term, 37, 38 formation, 33 game theory interpretation of, 39–43 leadership, 34 relative strength, 35, 36 Perera, Amanatha, 160–161 Pinheiro, Paulo Sergio, 208 Political Parties of US, on outsourcing, 321–322 Political prisioners, in Mayanmar, 207, 208 Population, India, 21 Posco, MOU with Orissa government, 301 Prabakharan, Velupillai, 160. see also Liberation Tigers of Tamil Eelam (LTTE)

Index Pressler Amendment on Pakistan in 1990, 12 Psychocultural prophylaxis (PCP), 91 Qutb, Syed, 252–253 Radical fundamentalism, 250 Rahman, Ziaur, 261 Rajapakse, Mahinda, 150 Rashtriya Swayamsevak Sangh (RSSS), 262 RBO. see River Basin Organization (RBO), by SAARC Rebel groups and defence expenditures, in Sri Lanka, 175 Regaining Sri Lanka: Vision and Strategy for Accelerated Development (RSL), 108 Regional water tribunal, SAARC on, 283 Rehman, Mujibur, 232 Reich, Robert B, on technology, 327–328 Resources, scarcity, 77. see also Natural disasters Rhine basin, 276 Richardsonian model, 19 for military expenditures in India, 21–23 in Pakistan, 24–29 River Basin Organization (RBO), by SAARC, 282 Rivers cooperation Convention on the Law of the Non-Navigational Uses of International Watercourses, 273–274 and international organizations, 272–275 of South Asia, 277–280 SAARC. see South Asian Association for Regional Cooperation (SAARC)

359 Rohingyas, in Mayanmar, 209–210 Rotfeld, Adam, 205 SAFTA. see South Asian Free Trade Agreement (SAFTA) SAPTA. see South Asian Preferential Trading Arrangement (SAPTA) Saud, King Abd al-Aziz ibn, 194 Scarcity, of resources, 77 Securitisation Copenhagen School on, 2–3 scholars on, 2 Senanayake, Don Stephen, 128 Senanayake, Dudley, 132 September 11, 2001 terrorist attacks, 14 Shariah, 250, 251 Sharif, Nawaz, 260, 340, 341 Simla Agreement, 1972, 10 Singh, Manmohan, 188 Singh, Sardar Sawaran, 9 Sinhalese, in Sri Lanka, 125. see also Unitary state structure, of Sri Lanka leaders, 125 Smith, Wilfred Cantwell, 255 Social expenditure, in Sri Lanka, 175–176. see also Defence expenditures, in Sri Lanka Social movements, in Sri Lanka, 152 Socio-economic condition, Sri Lanka, 106–107. see also Economy, of Sri Lanka Software Engineering InstituteCapability Maturity Model (SEI-CMM), 318 Software sector, in India, 318 Soulbury Constitution, in Sri Lanka, 134 South Asian Association for Regional Cooperation (SAARC) and South Asian rivers, 280–283 and RBO, 282 on regional water tribunal, 283 SAFTA, 281

360 South Asian Association of Regional Cooperation (SAARC) membership to Afghanistan, 189–190 South Asian Free Trade Agreement (SAFTA), 281, 292 South Asian Preferential Trading Arrangement (SAPTA), 291 South East Asia Treaty Organization (SEATO), 6 Southern African Development Community (SADC), 277 Soviet Union’s military invasion over Afghanistan in December 1979, 11–12 SPDC. see State Peace and Development Council (SPDC), in Mayanmar Sri Lanka, 344–345 AGOA and, 111 CFA in. see Ceasefire agreement (CFA), in Sri Lanka collectivist culture of, 113 development strategy for, 108 economy economic policy management, 111–112 entrepreneurial management, 112 export, 111 foreign investment, 112 garment industry, 111 negative growth rate, 110 education sector, 113 elections in, 150–151, 162–163 ethnic composition, 125–126 ethnicity distribution, 107 external position of, 109 human rights violation in, 163 international aid to, 106 Kandyan Kingdom in, 127 Ki-Moon, Ban on, 345 Kumaraya, Sapumal, 127 labour cost in, 181–182 labour-intensive military strategy of, 180–182

INDEX labour movement in, 152–153 life expectancy in, 181 literacy rates in, 110 LTTE in. see Liberation Tigers of Tamil Eelam (LTTE) mahajana sabhas, 152 MBA programmes in, 113–119 in building nation, 119–122 military expenditures of. see Defence expenditures, in Sri Lanka Sinhalese. see Sinhalese, in Sri Lanka socio-economic condition, 106–107 Soulbury Constitution in, 134 Tamil rebels in. see Liberation Tigers of Tamil Eelam (LTTE) Tamils in. see Tamils, in Sri Lanka tsunami and, 125 as unitary state. see Unitary state structure, of Sri Lanka UNP in, 128 violence in. see Violence, in Sri Lanka workforce development in, 109–110 Sri Lanka, trade with India, 292–294 ILFTA, 292, 293 Sri Lanka Freedom Party (SLFP), 128–129 Sri Lankan Monitoring Mission (SLMM), 156–157 Statement of Industrial Policy (SIP) of 1945, 59–60 of 1980, 61 State Peace and Development Council (SPDC), in Mayanmar, 207 Stilwell Road, 235 Sub-contracting. see Outsourcing Taliban, 186 Tamil Kingdom, 126 end of, 127 Tamil National Alliance (TNA), 161

Index Tamil rebels. see Liberation Tigers of Tamil Eelam (LTTE) Tamils, in Sri Lanka mobilization for power sharing of, 138–141 opposition to, 141–143 Tamil United Liberation Front (TULF), 135 Tanakpur Barrage project, 279 Tata Consultancy Services (TCS), 331 Technology workers, in US, 322–323 Terrorism, 75–76 Thapa, Surya Bahadur, 220 Topol-M, 88 Trade, of India with Bangladesh tariff and nontariff barriers, 288–289 trade imbalance, 287–288 with Bhutan, 289–290 with Nepal, 290–291 with Pakistan, 291–292 with Sri Lanka, 292–294 Trade liberalization, 301. see also General Agreements on Tariffs and Trade (GATT); World Trade Organization (WTO) Treaty of Friendship and Peace, 1972, 232 Treaty of Peace, Friendship and Cooperation, 1971, 10 Treaty of Transit and Trade. see Nepal, trade with India Trincomalee, 127 Tsunami, 79. see also Natural disasters effect of, 82 and Indonesia, 83 and Sri Lanka, 83, 125 Ulama, 250 Unemployment, and outsourcing, 325–326 UNESCO, on water, 270

361 UNICEF, on human rights violation in Sri Lanka, 163 Unitary state structure, of Sri Lanka Bandaranaike, Solomon in. see Bandaranaike, Solomon B-C Pact for, 131–132 Chelvanayakam, S. J. V., 134–135 Colebrook-Cameron Commission, 127–128 constitution. see Constitution, in Sri Lanka CWC, 135 de Silva, Colvin R., 134 Gunasinghe, Newton, 128 historical background, 126–128 Jayewardene, Junius Richard. see Jayewardene, Junius Richard language policy in, 129–131 LSSP, 134 Muslims in, 133–134 United Left Front (ULF), in West Bengal in Assembly elections of 1967, 34, 35 in mid term election, 37 formation, 33 game theory interpretation of, 39–43 leadership, 33 and Naxalite movement, 37 and President’s rule, 38 relative strength, 35, 36 United National Party (UNP), of Sri Lanka, 128 United Nations (UN) in setting democracy in Mayanmar, 207–208 United Progressive Alliance (UPA), 233 United States (US) and outsourcing to India. see Business process outsourcing (BPO), in India; Outsourcing and peace process in Nepal, 226–228 University of California, Berkeley, on outsourcing, 326

362 Urban LPGs, in India, 63–70 minimum per capita expenditure for, 66 per capita expenditure (1976-1977) for, 68 preferences (in 1986-1987) for, 67 rules followed under survey, 65–66 secondary data sources for, 65 voters classification on per capita income, 66 U.S. National Intelligence Council, on water, 270–271 US Cuban Liberty and Democratic Solidarity Act of 1996, 310 US Department of Labour, and foreign IT workers, 323 US Federal Trade Commission, on identity theft, 319 US Senate, on H-1 B visa program, 330–331 Violence, in Sri Lanka casualities from, 155 ceasefire to, 156 SLLM in, 156–157 LTTE in with government forces, 158, 159 within the group, 159–161 other Tamil groups, 161–163 political violence, 155–156 Vision Paper, 13 Wahab, Abdul, 250 Waliullah, Shah, 249–250 Water. see also Rivers equitable distribution of, 273 as global business, 269–270 integrated management of, 274 management. see Water management quality degradation, 274 salinity, 274 UNESCO on, 270 Water concerns, in India-Bangladesh relations, 238

INDEX Water for People, Water for Life, 270 Water management, 275–277 comprehensive approach to, 275 EUWFD, 276–277 Water security, 304 West Bengal, political condition, 32 elections. see Assembly elections, in West Bengal game theory interpretation, 38–43 political ideology, 32 political parties Bangla Congress, 32–33 Congress, 32 CP (I), 33 CP (M), 33 PULF. see People’s United Left Front (PULF) ULF. see United Left Front (ULF) Wheat aid, to Afghanistan, 189 Wickremasinghe, Ranil, 150–151 Wipro’s Spectramind, 318 Wolf, Aaron, on water, 271 Workforce development, in Sri Lanka, 109–110 World Trade Organization (WTO), 299, 300, 320. see also General Agreements on Tariffs and Trade (GATT) Doha Development Agenda, 301 export control in. see Export control, in WTO and India on food security, 301–302 World Water Council (WWC), 272 World Water Development Report, 270 Yashwant, Sinha, on outsourcing, 323–324 Zaranj-Delaram road, in Afghanistan, 187, 188–189 Zia, Khaleda, 231, 233, 236, 241 Zia-ul-Haq, 259 Zia-ur-Rehman, 231, 236