US reorients policy towards Myanmar after Tillerson Visit
Gautam Sen
November 27, 2017
It may be appropriate if the US were to complement its substantial humanitarian and economic assistance by encouraging or even exerting pressure on Myanmar to implement the KAC recommendations.
US Secretary of State Rex Tillerson had undertaken a short visit to Myanmar in mid-November. During the visit, he advised the Myanmar government to investigate the human rights violations in Rakhine and implement the recommendations of the Kofi Annan advisory Commission (KAC) set up by Naypyidaw for obtaining a peaceful, fair and prosperous future for the people of the province. Tillerson also announced an additional tranche of US $ 47 million in humanitarian aid, enhancing total US assistance for Myanmar in 2017 to $ 87 million. It is to be seen how US policy unfolds in the light of Tillerson`s observations, and impacts the situation regarding the Rohingyas still in Rakhine province as well as those displaced and presently sheltered in adjoining countries. The Aung San Su Kyi government’s reaction to Tillerson`s observations has been rather muted with nothing substantive stated in response.
The manner in which the situation in Rakhine is evolving does not engender much hope for the Rohingya community. The recent visit to Naypyidaw of the foreign minister of Bangladesh, the country which is presently sheltering nearly a million Rohingya refugees, to work out some mechanism for reversing the outward migration of the Rohingyas has not heralded any significant change in Myanmar`s policy on the return and rehabilitation of these refugees. An agreement just concluded between Bangladesh and Myanmar on Rohingya repatriation has already run into difficulty, with Myanmar`s minister for resettlement and welfare indicating that only 300 refugees will be taken back per day. There is no clarity regarding their post-return living conditions in Rakhine. And Rohingya outward migration continues. In this backdrop, it is to be observed whether the US government can induce some change in the posture and policies of the Myanmar government towards undoing the physical devastation caused by state-sponsored and ethnic violence targeting the Rohingya in Rakhine, and increase the confidence level of the limited number of the people of this community still living in the area.
The Trump administration could succeed to an extent in cajoling the Aung San Suu Kyi government to start a credible rehabilitation process given the substantial economic assistance that the US is in a position to provide Myanmar, apart from the support it could extend to Myanmar at international fora towards staving off widespread criticism of atrocities against the Rohingya. Since 2012, the US has provided more than US $ 500 million in aid to Myanmar and partnered with member countries at the World Bank and Asian Development Bank to promote critical developmental assistance and investment to the tune of nearly $ 3.8 billion to that country. It may be appropriate if the US were to complement its substantial humanitarian and economic assistance by encouraging or even exerting pressure on Myanmar to implement the KAC recommendations. The exertion of such leverage may be an appropriate method to ensure that Naypyidaw starts the rehabilitation process in Rakhine in a visible and effective manner under some international oversight. In the present circumstances and in the light of past developments, it is doubtful that the Myanmar government would on its own and in an even handed manner execute the rehabilitation process unless goaded to do so by important members of the international community. Tillerson, during his visit, had opined against sanctions on Myanmar, at this stage.
Another factor which apparently will impinge on US policy towards Myanmar pertinent to the Rohingya issue is China’s expanding interest and involvement in the matter. Foreign Minister Wang Yi recently opined that, in the interest of the successful implementation of the `One Belt One Road` initiative, China would like the distraction caused by the Rohingya crisis to be dealt with through a three-step approach. But China has so far neither elaborated upon the contours of the approach nor outlined the course of implementable action to deal with the basic causes of the problem. There is no hint that Beijing has any intrinsic interest towards substantively turning around the miserable plight of the Rohingyas who, today, do not seem to have any prospect of reclaiming even their residential, non-citizen, status in Myanmar. While the Bangladesh government is obviously pleased with the Chinese assertion, it is still to realize the overall import of Chinese policy on alleviating the present and increasing Rohingya refugee burden both politically and economically. The Trump administration, however, may not like to leave Myanmar under increasing Chinese influence.
Chinese mediatory efforts between Bangladesh and Myanmar may lead to some enumeration of the Rohingyas in Bangladeshi camps as well as organized albeit forcible return of some of the refugees to designated camps in Rakhine without providing them the opportunity for engaging in livelihood maintenance activities of their choice and even observing social customs. Such a milieu may suit the present Myanmar government without raising the hackles of the majority Burman community in the affected Rakhine province, and to a limited extent also Bangladesh if a few thousands of refugees can be repatriated to Rakhine. However, with China’s involvement in western Myanmar, a greater inflow of Chinese men and material for development projects and infrastructure in the area would result, with a concomitant increase in Chinese influence on the regime in Naypyidaw. The US government will have to adroitly craft its policy on Myanmar and the Rohingya issue so that it is able to contend with the burgeoning Chinese influence, enhance its stake in Myanmar`s socio-economic development and alleviate the plight of the Rohingyas from a humanitarian angle.
Post the Tillerson visit and the fact-finding tour of a Congressional delegation led by Senator Jeff Merkley, the Trump administration seems to have hardened its posture on Myanmar`s handling of the Rohingya crisis. Tillerson`s official statement from the US State Department on 22 November, while indicating support at the UN General Assembly Third Committee and the Security Council for constructive action, has also indicated Washington`s intention to pursue accountability (in Myanmar, of its government and others involved) through US law, including targeted sanctions. Tillerson has conveyed strong observations to the effect that horrendous atrocities against the Rohingyas have taken place, inter-alia describing the situation in northern Rakhine as marked by ethnic cleansing and human rights abuses by Myanmar`s military and local vigilantes, warranting an independent investigation on the happenings and possible targeted sanctions. It may be realistic if the US government were to act decisively through its aid providing mechanism to induce Myanmar to start the rehabilitation process under the KAC framework and international supervision. China may also be brought into such an arrangement so that its scope to charter an independent course on Myanmar, driven exclusively by its economic and strategic interests, are circumscribed. Naypyidaw may be compelled to acquiesce in the process. Such a turn of events may not be inimical to the interests of Bangladesh and India also.
The author is a retired IDAS officer who has served in senior appointments with Government of India and a State Government.
Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.
US-Myanmar Relations, United States of America (USA)
Weapons are the Combat Differentiators: The BrahMos Air Launched Cruise Missile
Kishore Kumar Khera
November 27, 2017
“Weapons differentiate between Air Forces and Flying Clubs” is an often heard adage. Weapons capability is an integral part of an Air Power matrix. In the last three months, a number of successful indigenous weapons trials in India indicate a positive move in the right direction even if a little late in certain cases and after multiple failures in others. India’s dependence on foreign vendors for weapons and weapon platforms is well known and it is the largest importer of weaponry.
“Weapons differentiate between Air Forces and Flying Clubs” is an often heard adage. Weapons capability is an integral part of an Air Power matrix. In the last three months, a number of successful indigenous weapons trials in India indicate a positive move in the right direction even if a little late in certain cases and after multiple failures in others. India’s dependence on foreign vendors for weapons and weapon platforms is well known and it is the largest importer of weaponry. Importing weapons acts as a stimulant for defence capability but it is short lived owing to severe limitations in terms of quantum (cost factor), quality (technology) and sustenance (maintenance support). Indigenous weapons development is therefore the key to efficient and effective security.
In July 2017, the Defence Research and Development Organisation (DRDO) developed Quick Reaction Surface to Air Missile (QRSAM) was successfully flight tested.1 This was followed by the successful final Development Flight Trials of Astra –the Beyond Visual Range Air to Air Missile (BVRAAM) – against a Pilotless Target Aircraft (PTA) in September 2017.2 On November 3, the indigenously developed light weight Glide Bomb, SAAW (Smart Anti Airfield Weapon), with an effective range of 70 km was tested.3 Then came, after multiple failures, the successful test flight of ‘NIRBHAY’, the Long Range Sub-Sonic Cruise Missile with an indigenously designed Ring Laser Gyroscope (RLG) and a range of over 700 km.4 And finally, on November 22, the most significant development in this class took place when the Indian Air Force (IAF) successfully fired the BrahMos, the world’s fastest supersonic cruise missile, from a Su-30 MKI fighter aircraft. With a warhead weighing 300 kg, this 2.5 tonne missile has an engagement envelope of 400 km. The operationalisation of the BrahMos Air Launched Cruise Missile (ALCM) will significantly bolster the IAF’s combat capability. BrahMos, with a multi-platform and multi-mission role, is now capable of being launched from land, sea and air, completing the tactical cruise missile triad for India.5
Test firing is one of the initial yet significant steps towards the operationalisation of a system. It will take a while before all the above mentioned weapons systems are declared fully operational and inducted for operational deployment. But the die is cast. Once operational, for the first time in India’s history, the armed forces will have a significant share of cutting edge weapons of indigenous origin.
Although already deployed as a ground based and sea based weapons system, the BrahMos ALCM adds a different dimension to combat capability. It converges the advantages of a missile system with the flexibility of air power. A standoff range of 300 to 400 km keeps the mother aircraft outside the lethal zone of all known terminal defence weapons. If need be, the mother aircraft can go deep inside the adversary’s territory with requisite combat support and carry out the attack on target systems hitherto not reachable. In practical terms, with this weapon, the effective range for engaging targets (radius of action) increases by 25 to 30 per cent and the size of engagement zone doubles.6
Carrying out attacks against targets defended by multi-layered air defence weapons systems has attendant risks. Non-stealth aircraft in a ground attack configuration have a large Radar Cross Section (RCS) given the imperative of carrying multiple external weapons. This leads to early detection by adversary surveillance and tracking systems. Besides early detection by the terminal weapon radars, the aircraft configuration imposes a severe limitation both in terms of its speed and manoeuvrability. Unless protected by multiple high powered Electronic Warfare (EW) warning and counter measure systems, there is a high probability that terminal weapons would be able to engage strike aircraft. This leads to either aborted attacks or loss of aircraft. All this can be avoided by carrying out an attack from outside the lethal engagement zone of the terminal weapon systems. For that, an air launched weapon with a range greater than the lethal zone of terminal weapons is required. The BrahMos ALCM is just that. Although BrahMos itself can be intercepted, owing to its relatively smaller RCS and high speed in the range of 2.8 to 3 Mach, interception is much more difficult than intercepting a fully loaded aircraft. This leads to a high assurance level of success of an attack.
Interaction between the primary damage mechanisms of a weapon (like blast, fragmentation or penetration) with the vulnerability of a target system defines the weapon’s effect on target. The amount of explosive in the warhead, the nature and type of casing along with the explosion initiation mechanism and timing determine the nature and extent of damage. The damage caused by each weapon assists in calculating the number of weapons required to achieve the requisite degree of damage on the target system. Owing to its high kinetic energy at the terminal stage, BrahMos has a high penetration potential but subject to the warhead retaining its shape during impact and penetration. The weight of its warhead, which indicates the quantum of explosive carried, indicates that the damage caused by BrahMos would be akin to one 1000-pound bomb. This is a limiting factor. In addition, the weight of attack is relatively low as only one such missile can be carried per aircraft. The low quantity of explosives carried coupled with the fact that one aircraft would be able to carry only one weapon necessitate a high force level. In other words, a very large number of aircraft loaded with BrahMos will be required to neutralise a large target. This can be offset by high weapon delivery accuracy, with a Circular Error of Probability (CEP) comparable to the dimensions of the vulnerable portion of the target around the aiming point or Desired Mean Point of Impact (DMPI).7 Therefore, terminal accuracy attains great significance. An accurate attack can result in damaging the critical sub system to make the target system non-functional and achieve the desired effect. With this size of warhead, sub 10 metre accuracy is ideal for most target systems.8
Three aspects of BrahMos that are still a work in progress are: extending its range, increasing its speed to hypersonic level, and shrinking its size so that three missiles can be carried by a single aircraft. While all three are steps in the right direction, the most significant change that is required is in terms of further enhancing the missile’s accuracy by fine-tuning its terminal guidance. Greater accuracy will actually reduce the number of weapons required to achieve the desired effect on a given target system.
Originally scheduled to be operational by 2012, the BrahMos ALCM is heading to become a reality after a delay of five years. Now is the time to step on the accelerator. Work needs to be carried out on finalising the modification of the aircraft in terms of structure, electrical and avionics, the manufacture of suitable pylons and changes in the weapon to ensure seamless compatibility and communication between the three. Necessary ground handling and support equipment and infrastructure will also have to be defined for storing, servicing, testing, conveying and loading of the weapon. Thereafter, work needs to be initiated with respect to the parallel processing on aircraft fleet modification, pylon manufacture, support equipment and infrastructure and weapon production. This will enable the availability of this unprecedented and game changing weapon delivery capability for operational deployment in adequate strength at the earliest. A similar approach also needs to be followed in the case of the other indigenous weapon systems that have been tested in recent months. These indigenous long range and accurate weapons in the air-to-surface, surface-to-surface, surface-to-air, and air-to-air categories in adequate quantity will partially offset the capability deficiency resulting from the IAF’s dwindling force structure.
Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.
6. Engagement Zone is the area in which an aircraft is capable of engaging a target with on board weapons with adequate fuel to return to parent base. It is calculated as the circular area with parent base as the centre and radius equal to the sum of maximum operational range of on board weapons and the maximum distance the aircraft can cover in combat configuration with adequate fuel to return to the parent base. Friendly area is not included in this calculation.
7. Circular Error of Probability (CEP) is the distance in metres from the aiming point on the target within which the impact of 50 per cent of the weapons fired takes place.
8. Number of aircraft required to attack a target reduces significantly when weapon delivery accuracy increases. Halving the CEP generally reduces the number of attack aircraft required by 75 per cent for a typical combat zone target.
India should invest in creating a competitive solar module sector across the manufacturing chain, from procuring primary resources to the finished product.
Recently, the International Energy Agency (IEA) has acknowledged India would be the fastest growing energy consumer – and market – till 2040. This applies not only to the hydrocarbon sector, but also for renewable energy (RE), as fast-declining costs turn solar and wind energy into the main drivers of growth in the power sector.
What does this mean for India, and more importantly, for its energy security? Poised to be among the top five renewables generators in the world in a few decades, moving up several notches from its current seventh position, will renewables solve India’s energy insecurity? After all, despite having an installed generation capacity of around 303 GW – the fourth largest – more than 300 million citizens are yet to gain access to electricity. At the same time, a growing economy and rising living standards has seen per capita consumption of energy increasing from a below global average – which means that there is room for even more growth! India is also one of the largest growing passenger vehicle markets. Yet, its stagnating domestic oil and gas production has seen import dependency for both growing year-on-year. While low oil and gas prices saw India’s oil and gas bill decreasing despite a rise in import volumes, a combination of OPEC strategy and West Asian geopolitics has led to the price of oil ascending gradually from a low of US $28 a barrel in early 2016 to more than $60 (Brent) currently.
No doubt, oil is not really a major contender for the power sector – except when intermittent power supply compels the use of diesel generators – and here renewables seem to be ruling as prices per unit of solar and wind-based generation are falling rapidly. Prices have dropped from a high of ₹17/unit in 2010 to ₹2.44 per unit by mid-2017 for solar and to between ₹ 3.51 to 5.92 per unit for wind as against coal which stands at around ₹3.20 per unit. With the goal set at 100 GW by 2022, India had ramped up its solar generation capacity to around 13 GW and 32.5 GW for wind by the end of fiscal 2016-17 as against 3744 MW and 17.4 GW, respectively, at the end of 2014-15. 1
That is the good news. But the challenges with regard to energy security remain grave. Much of the reasons lie with skewed policy decisions.
India’s impressive growth of RE generation has led to a vast demand for further growth, which, in turn, has led to huge imports of solar panel modules, mainly because domestically manufactured solar modules were more costly – around 10 to 15 per cent more – than imported ones from China, Taiwan and Malaysia. This led to the Indian government filing a petition for anti-dumping duty on module imports. That, in turn, led to a growing reluctance by solar exporters, particularly from China, Taiwan and Malaysia, to supply modules to India. In fact, around 89 per cent of solar modules used in India in 2016-17 were imported, and it is unlikely that domestic alternatives will be able to fill the gap. Moreover, the price of imported solar modules have increased by almost 12 per cent since the second half of 2017, due to the increased demand in overseas markets as well as a shortage of polysilicon, an important component in solar panels. Given that modules contribute to more than half of the overall cost of a project, the price increase is expected to hike up project costs by 18 per cent, which roughly translates into an increase of around ₹895 million for a 100 MW project.2 In per unit terms, this is expected to see the cost of solar go up to ₹3.50 to ₹4.00.3 With around 10,842 MW of utility-scale solar energy in the pipeline, the price hike is expected to affect project installations as the institutions which provide finance for the sector are showing increasing reluctance to finance projects due to concerns over cost recoveries and debt coverage. Alternatively, it may lead to an increase in the cost of solar power as the price hike is passed on to the customers. Hence, the very reason for the popularity of solar power may be defeated, leading to a fall in generation.
While a case can be made for continuing the import of solar panels, it does not lend itself to enhancing the country’s basic energy strategy of greater energy independence and security. For this, India would have to invest in creating a competitive module manufacturing sector across the manufacturing chain, from procuring primary resources to the finished product.
Manufacture of solar panels and wind turbines depend on access to rare earth elements (REE), which are a special class of 17 elements or minerals that have extensive use across various industries, including computer, healthcare, defence systems and batteries, apart from clean energy systems. As of now, China has the largest reserves of REE and largely controls the market, sometimes even using it as a strategic tool.4 Interestingly, India too has significant reserves of REE. According to some studies, it has the fourth largest reserves after China, the US and Australia. However, despite commencing rare earth mining activities more than five decades ago, India has not leveraged its advantage. A combination of low-cost Chinese production and lack of R&D, including in extraction techniques and facilities for the separation of individual elements from combined elements, has kept the sector from progressing up the value chain.
Taking cognizance of the challenge, the government has initiated a review of requisite policies to provide a fillip to the sector. In August 2017, the Supreme Court directed the central government to revise the 2008 National Mineral Policy by the end of the year and emphasised the need to encourage scientific mining through proper survey and exploration, as well as the need for adopting better mining practices, advancing R&D, and regulation of unauthorised activities. A new committee has been set up comprising representatives of various ministries and industry – keeping in mind the importance of involving the private sector – as well as representatives of organisations such as Indian Bureau of Mines, Geological Survey of India, Niti Aayog and the Railway Board. One of the main focus areas recommended was improved exploration and scoping of minerals, including rare earth and strategic minerals.5
With policies like electrification of the transport sector and sourcing 40 per cent of power requirements from RE, India needs to ensure that it has the necessary primary resources required to power its energy sector if it is to achieve its goal of energy security. No doubt, finding alternatives to low-priced Chinese REE or developing substitutes will take time and investment. But in the current situation, where China controls the global supply of REE and has even begun stockpiling in preparation for future market demand, efforts to diversify the REE supply chain is critical, both from the economic and security perspectives. India is a latecomer in the sector, but with requisite policy initiatives and implementation, it should join the battle for the soon-to-be-more-competitive renewables market.
Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.
The benchmark price could be different from the initial cost estimate because, in many cases, the negotiation stage is reached several years after in-principle approval.
The disputation over the price India will pay for the 36 medium multi-role combat aircraft, the contract for which was signed in 2016, brings into focus the vulnerability of the process of estimating the cost of acquiring defence equipment, many of which are highly complex systems of systems.
The procedure followed by the Ministry of Defence requires the cost to be estimated first at the initial stage of the procurement proposal for the purpose of obtaining approval for starting the tendering process. The process is repeated just before the opening of the commercial offers with a view to determining an up-to-date and more realistic cost – or, the benchmark price – with reference to which a view could be taken by the contract negotiation committee about the reasonableness of the lowest price quoted by a vendor.
The benchmark price could be different from the initial cost estimate because, in many cases, the negotiation stage is reached several years after in-principle approval. But an error at either of these two stages has serious implications. If, for example, the cost of an equipment that can be procured at Rs 500 crore were to be wrongly estimated as Rs 1,000 crore at either of these two stages, a vendor quoting even Rs 900 crore would appear to have made a very reasonable offer.
While the importance of costing cannot be gainsaid, it is arguably the weakest link in the defence procurement process. This has largely to do with the absence of a policy framework as also the fact that the tools and techniques required for application of costing methods to defence procurements are either non-existent or not adequately refined. There is some irony in this, since costing, as a discipline, is fairly developed.
Various government regulations place the onus of ensuring the reasonableness of the cost of procurement squarely on the procuring agency. While some broad guidelines have been prescribed by the Ministry of Finance that can be followed for discharging this responsibility, these guidelines have many loose ends, especially in the context of defence procurements.
The procedures governing capital and revenue procurement in defence broadly refer to three methods of costing: Budgetary Quote (BQ)/Market Survey (MS), Last Purchase Price (LPP) and Professional Officers’ Valuation (POV). Each of these has severe limitations.
The BQ/MS method, for example, is more appropriate for the purpose of initial cost estimation rather than benchmarking. But, more to the point, the budgetary quotes are generally inflated and, therefore, need to be deflated to arrive at a realistic cost. The problem is that there is no standard rule for the deflation factor to be adopted.
The LPP method presents its own problems. Firstly, this method works best if there is a like-to-like comparison between the equipment bought previously and the one for which the cost is to be estimated. Often this is not the case. Therefore, the LPP has to be adjusted to accommodate the difference between the two, which is a challenge in itself.
Even if the previous and proposed purchases of an equipment are comparable, the LPP may still require to be adjusted on account of inflation during the years since the previous contract was concluded. Again, there is lack of clarity on which inflation indices are to be used for this purpose, especially if the system is being procured from abroad and the seller is sourcing the components of the system from a number of other countries. This method cannot anyway be adopted if no LPP is available or if the equipment to be procured is an upgraded version of, or happens to be materially different from, the system for which the LPP is available.
The adoption of the POV method, which is the last resort, is also dependent on the availability of extensive databases and component-wise break down of the system to be procured.
The biggest challenge faced by procurement personnel is to take a call on the extent of variation, with reference to the estimated cost and benchmark price, that can be accepted while negotiating with the lowest bidder. The fact of the matter is that the entire process of costing is ridden with lack of clarity as regards the standard method of costing, if any, as well as the tools and techniques for the application of these methods. The problem is aggravated by the absence of extensive price databases.
The brunt of these difficulties is borne by the Services Headquarters which is where the costing is generally done with or without the help of the cost advisors in the Ministry of Defence. This is a bit unfair, considering that the onus of costing is on the Contract Negotiation Committee (CNC) and not the services alone.
Several steps need to be taken to address the issue of costing. To begin with, there is a need for the Ministry of Defence to standardise the methods and refine the process of costing in defence thus ensuring that the entire acquisition team collectively decides the method to be adopted in each case at the initial stage of cost estimation as well as at the stage of benchmarking before the commencement of commercial negotiations.
While standardising the methods, the ministry could also consider the possibility of adopting the method of deciding on the reasonableness of the commercial offer by seeking its justification from the vendor. It should be possible to adopt this method if the matrix for assessing the reasonableness of the offer is indicated in the Request for Information/Request for Proposal.
It is equally important to consider the possibility of seeking information through the Request for Information (RFI), especially from foreign vendors, relevant for benchmarking, such as the system break down and the inflation indices applicable in the countries from which vendor is likely to source the components.
Standardisation of the costing methods and refinement of the tools and techniques will work only if databases are maintained by the ministry on price and other factors such as inflation indices that impact costing. The Management Information System (MIS) Cell of the Acquisition Wing in the ministry will need to be enabled to take on this responsibility.
The cost and effort required for creating and maintaining these databases could possibly be minimised by making use of the products and tools that are available commercially from external sources which provide continuously updated data on prices of various components of complex defence systems as well as spares, culled out from contracts concluded by other countries.
The use of external sources is permitted by the existing procurement procedure, though probably this provision has hardly ever been invoked. Use of the products and tools available in the market do not carry the risk of the confidentiality of the process being compromised as the costing can continue to be done within the ministry.
Authentic information available from external sources should make it possible for the ministry to also enlarge the scope of the Fall Clause by making the vendor commit to not charging a price that is higher than the price at which the same equipment is sold by him to some other country.
Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.
The Saudi Aramco IPO and Crown Prince Salman’s Ambitions
Chithra Purushothaman
November 16, 2017
Crown Prince Salman has been using oil as a tool to further his political ambitions both domestically and internationally, and Saudi Aramco acts as a nucleus around which his ambitions revolve.
Saudi Aramco’s announcement of its first-ever initial public offering (IPO) in early 2017 came as a surprise to many. Being the largest oil company in the world with presumably the largest reserves and lowest production costs, the reasons behind the IPO continue to be of interest. A cursory analysis of the reasons behind the IPO point to the Kingdom’s increasing budget deficit due to the plunge in international oil prices in the wake of weak demand and the shale revolution in the United States. But a deeper probe indicates the IPO’s connection with ongoing attempts to effect a transformation on both the domestic and foreign policy fronts with a view to bolster Saudi Arabia’s position in the region as well as retain its supremacy in the oil market.
In a bid to consolidate power and authority, Crown Prince Mohammed bin Salman has unfurled an array of political, economic and social reforms. His brainchild, Vision 2030, was primarily aimed at diversifying the economy from its over-dependence on oil revenues, privatisation, and making the Kingdom an attractive destination for business and investment. Salman’s emphasis on creating a modern and moderate Islamic country has gained currency amongst the youth, who are facing issues ranging from a deeply conservative society to unemployment. The Crown Prince’s anti-corruption drive, whereby he targeted rivals and tightened his grip, has made him popular amongst the masses and helped him gain access to assets worth billions. Even though the targeting of businessmen and the elite has given rise to concerns amongst investors, Salman is trying to build his reputation as a ruler who favours transparency and accountability that would help legal businesses to flourish. Apart from Vision 2030, several multi-million dollar projects like NEOM, an artificial intelligence-driven city on the Red Sea at an estimated cost of US $500 billion, has been planned to make the Kingdom a completely modern country.
However, the plunge in international oil prices resulted in an economic slowdown both in Saudi Arabia as well as other oil-exporting countries. While Vision 2030 emphasised on weaning the Saudi economy away from oil revenues, falling oil prices have led to a reduction in revenues that adversely affected the economy. That, in turn, pushed the government to effect a policy reversal aimed at increasing oil prices to support the economy in the short and medium terms. Hence, diversifying the Saudi economy away from oil became a policy prerogative, albeit in the long term. The IMF Regional Economic Outlook report for the Middle East and Central Asia notes that Saudi Arabia would need to price its oil at US $70 per barrel in 2018 in order to balance its budget.1 With current oil prices at a two-year high crossing $60 per barrel, the November 2016 OPEC decision to cut oil production has borne fruit, thereby making it possible for Saudi Aramco’s value to rise to around $2 trillion, despite conflicting reports suggesting that Aramco’s value stands at only around US $ 1 trillion.2 Furthermore, the Crown Prince aspires to make the Saudi sovereign wealth fund the largest in the world3 by transferring the ownership of Aramco to the fund along with selling five per cent of Aramco’s shares. It goes without saying that Saudi Arabia would do its best to try and increase global oil prices in order to raise the value of Saudi Aramco as high as possible.
On the international front, Saudi foreign policy priorities have transformed ever since Crown Prince Salman took over the reins of power. His assertiveness in policy decisions has seen an array of proxy wars, including the Qatar blockade, intensification of the Yemen crisis, and the resignation of the Lebanese prime minister, which can all be perceived as part of the Saudi strategy of containing rival Iran. Saudi policy towards Iran also seems to have found resonance in the Trump Administration’s growing hard-line posture towards Tehran. Salman’s decisions are reflective of Saudi interests and the emerging regional alignments against the increasing power and influence of Iran. To prosecute its regional proxy wars against Iran and its supporters, Saudi Arabia would have to ensure the availability of sufficient funds. Even though Crown Prince Salman has the support of the US, the latter’s support is not without a quid pro quo. Trump, in exchange for supporting Salman’s policies in the region, is most likely to exert pressure with respect to listing Aramco’s shares in the New York stock exchange. In addition, Trump wants Saudi Arabia to buy more arms4 from the US. Finally, one cannot also rule out a US-Saudi deal to ensure significantly higher oil prices.
Efforts by OPEC to cut production by 1.8 million barrel per day with a view to propping up prices as well as driving out competition from non-OPEC oil-exporting countries, especially after the shale revolution in the US, are gradually beginning to show results. OPEC is scheduled to meet again on November 30, where its members would most likely decide to continue with the production cuts for another year from March 2018. Even though a supply cut has led to OPEC losing out on the largest markets, including China and India, it has helped in getting oil prices back on track with the support of Russia. Both the US and Russia benefitted immensely in capturing some of the most lucrative oil markets. In addition, rising oil prices would be equally beneficial for all oil-exporting countries.
Even while all of Salman’s efforts are aimed at reducing the Kingdom’s dependence on oil, oil continues to remain the driver of the Saudi economy. Salman has been using oil as a tool to further his political ambitions both domestically and internationally. Hence, Saudi Aramco acts as a nucleus around which all of Salman’s ambitions revolve. Playing out oil politics to become the unquestioned leader in the Kingdom, further Saudi Arabia’s supremacy in the region and attract investments from abroad has been the strategy behind Salman’s political adventures.
Yet, there is no clarity as to the date or the venue of Saudi Aramco’s IPO listing. Saudi Oil Minister Khalid al-Falih mentioned at the Future Investment Initiative held in Riyadh on 24 October that the IPO would take place in 2018.5 Saudi Arabia is also wooing emerging economies like China and India, which are some of the largest importers and consumers of Saudi oil. Interested bidders from these emerging powers could be given preference as they would continue to be huge markets in the future. There are also rumours that Saudi Arabia might think of a private placement of the IPO to China. However, the decision on where to list Aramco’s shares other than in the Riyadh stock market rests with Crown Prince Salman. An international listing would bring in more investors and attractive bids. However, before such a decision is taken, Saudi Arabia has to resolve issues like what details to disclose (especially details regarding Aramco’s crude oil reserves) to buyers and the terms of the IPO.
In times of low oil prices, national oil companies in West Asia are coming under pressure to remain profitable and fulfil their commitments to their respective governments. Saudi Aramco, being the main revenue earner for the Kingdom of Saudi Arabia, has the responsibility to shoulder the financial burden involved in initiating the reforms envisaged by Crown Prince Salman. Thus, Saudi Aramco’s IPO is part of a broader strategy to further the Crown Prince’s regional and global aspirations.
Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.
Odisha’s Potential Role in Enhancing Security in the Bay of Bengal
Bhabani Das
November 13, 2017
A long coastline, ports, and availability of airfields all make Odisha a strategic asset that provides considerable leverage for securing India’s national interests and enhancing influence in South East Asia.
The Act East Policy and the intent to develop overland communication linkages through the North-Eastern States for enabling the seamless movement of goods and people between the South and South East Asian regions is a strategic necessity for India. This is because the emerging markets in South East Asia and the economies of strategically located countries like Myanmar, Thailand, Indonesia and Singapore along the Strait of Malacca are on an ascending spiral and have the potential to grow at a faster pace if connected with each other. This is a win-win situation for India because it is likely to transform the security situation in the north-eastern region by accelerating economic growth there. Enhanced Indian interaction with South-East Asian countries may also moderate Indian concerns about China’s influence in that region.
Importance of Bay of Bengal
As regards the maritime dimension of India’s Act East policy, it is important to note that the access to Southern and Western Asia from Eastern and South-Eastern Asia is through the Indian Ocean. India assumes special significance as movement of vessels in the Indian Ocean can be monitored from the Union Territories of Andaman and Nicobar and Lakshadweep. While India has a pivotal role to play in maintaining and ensuring security in the Indian Ocean as a whole, in recent times China has shown active interest in enhancing linkages and influence in the countries of the Indian Ocean littoral. In this regard, an important area of the Indian Ocean, the Bay of Bengal, which is enclosed from three sides by the territories of India, Bangladesh and Myanmar has not escaped Chinese attention. India must wake up to the reality that its Eastern coast needs a different kind of security framework than the Western coast. The growing Chinese interest in Myanmar and Bangladesh, both of which are geo-strategically important as they cover the northern and eastern coastlines of the Bay of Bengal, makes a rethink in this regard imperative to ensure optimal security.
A Special Force
On India’s Eastern coastline, only Vishakhapatnam and Chennai are major ports with an adequate naval presence. The gap between Vishakhapatnam and the easternmost point along the coast is large and there is no viable force to safeguard the intervening area. Further, the vast coastal stretch northwards of Vishakhapatnam remains vulnerable given the absence of an adequate force presence up to Kolkata, which is not a seaport. Here, it must be remembered that although Western Naval Command is located in Mumbai with various Naval/Army deployments along the west coast from Goa to Porbandar-Jamnagar, terrorists still managed to penetrate the maritime security cordon on 26/11.
Given this, in order to adequately guard the vast stretch of the land mass and associated coastline from Vishakhapatnam northward in conjunction with the Navy, Coast Guard and Marine Police of the states, there is a need to place a Rapid Reaction Force (RRF) contingent in the area, which should have amphibious capability as well. This will throw a maritime security arc in the Bay of Bengal to the sea-trade routes from Andhra Pradesh northwards till Myanmar and eastwards towards Thailand till the Strait of Malacca.
Situating Odisha
Odisha assumes special significance in this context. By virtue of its location, the state has a wider ‘line of sight’ covering all the places around the Bay. Unknown to many today, Odisha has had a rich maritime tradition and its geostrategic importance stands inadequately appreciated. The famous ‘Bali Jatra’, being observed with pomp and enthusiasm every year in Odisha during autumn, offers a reminder of the seaward forays of Odia sailor-merchants (called Sadhabas) and the nostalgia about it persists till today.
During the Mauryan era, Emperor Ashoka used Odisha to send out Buddhist preachers to Sri Lanka and to countries of South East Asia. Ashoka’s influence extended from Sri Lanka to the Indonesian islands and even as far as Japan. There were established trade routes connecting Odisha to South East Asian countries. These routes need to be revived. A long coastline, ports, and availability of airfields all make Odisha a strategic asset that provides considerable leverage for securing India’s national interests and enhancing influence in South East Asia. There is also a cultural connect with South East Asian countries that can be revisited and tapped for strengthening the Act East policy.
In addition to its coastline, ports and airfields, Odisha is also rich in mineral resources. Recent years have seen an appreciable infrastructure build-up in the state, the establishment of major steel plants and an oil refinery at Paradip, and the inclusion of Bhubaneswar in the list of the national plan for establishing Smart Cities. Further, Odisha is home to strategic installations such as the Chandipur missile testing range, Abdul Kalam Island, storage of strategic reserves of petroleum, IOCL Refinery at Paradip and steel industries. It must be appreciated that along with economic development, security threats also multiply. The recent terror related activities in the state, especially since 2015, show that Odisha is on the radar of global terrorist groups. Given all this, the presence of active military units carrying out regular training manoeuvres (even if it is for enhanced coastal security) should deter such groups.
The Indian Navy is already engaged in the Sagar project and is planning to raise its security quotient along the West Bengal Coast by building facilities at Tajpur to deal with possible threats emanating from the north and east of the Bay. However, in view of the discussion above, there is a growing need for a military presence in the space between Vishakhapatnam-Andaman and Sagar Project/Tajpur, which can operate in coordination with the Navy and Air Force as a rapid reaction force (RRF). Such a force can focus on physical area domination, protection of possible landing sites, coordination with friendly neighbours and ‘add on’ to the taskforce in the Andaman Islands and greatly consolidate India’s security efforts in the Bay of Bengal. In the background of the recent terrorist action in Bangladesh and subsequent crack-down, the possibility of the migration of such radical elements to the coastal areas of Digha, Chandipur, IOCL at Paradip, Konark, or even Puri cannot be ruled out. Remaining underprepared for such potential threats will only add to our embarrassment if they ensue.
The proposed force contingent must have the capability for beach landing, air transportation and a small detachment of Special Forces for high-risk missions. Accordingly, various components of the task force need to be adequately equipped and trained. As a corollary, such a contingent can also augment the capacity of the National Disaster Relief Force (NDRF) in the region.
Leveraging Odisha’s location
It is time to develop Odisha as a strategically important state and effectively use its location for security, surveillance and domination of the East coast with electronic and physical capabilities of all three services in conjunction with the Coast Guard and the state machinery. The fallout of all this will be enhanced national capabilities in multiple spheres and the provision of an impetus to Odisha’s development.
As regards military training, Odisha provides the best possible menu in terms of types of terrain and weather conditions. While the temperature soars to 48-49 degrees Celsius in summer, in winter the mercury drops to the single digits in the western part of the state. Rivers provide water bodies and the state’s coastline is ideal for amphibious training. The state’s hills, with their jungles, offer the desired level of difficulty for combat orientation.
The shortest aerial route from Delhi to Port Blair passes through Odisha. A dedicated force contingent, as proposed above, will give quality protection to national assets, and help promote the national interest in the neighbourhood. Moreover, the access routes to the Bay of Bengal by any hostile sea-borne elements can be better monitored by such a dedicated joint services task force, which will also provide a launchpad for and synergy to the forces in the Andamans.
On the internal security front, the approximately 475 km-long long coastline will experience better security. It will provide better preparedness for emergencies like the 1999 super cyclone. At the same time, Odisha will also benefit in terms of development of infrastructure such as airfields, surface connectivity and construction of military stations. Needless to add, all this would generate employment opportunities for locals in various projects and boost economic activity.
Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.
Renewed Mandate from Heaven: Xi Unfolds Grand Strategy for China’s Long March
G.G. Dwivedi
November 10, 2017
Xi envisions China as a key player in shaping the new global order with Chinese characteristics. His grand strategy is in consonance with the Chinese strategic culture of ‘thinking deep and far’
According to Chinese traditional belief, it is the ‘mandate of heaven’ (tianming) that selects an individual to rule. A Confucian idea to facilitate the dynastic cycle, it implied that while good rulers would be allowed to govern with a renewed mandate, the mandate would be revoked in the case of despotic and unjust rulers.
The first Chinese ruler to claim the mandate of heaven was King Wen of Zhou (1050 BCE), a pre- dynastic feudal state in the Wei River Valley. Wen remained a model for many subsequent emperors and politicians. Rival dynasties often used the concept of mandate as a pretext to gain legitimacy for perpetuating political unrest. A case in point was the Qin Dynasty (221-206 BCE) under Shi Huangti, who used it to justify the conquest of all other states, thus unifying China for the first time.
Post the 1949 Communist Revolution, Mao emerged as an autocratic paramount leader of the People’s Republic of China (PRC). His ideology ‘Mao Zedong Thought’, encapsulated in the famous ‘red book’, was enshrined in the party’s constitution. After Mao’s death in 1976 followed by a brief power struggle, Deng Xiaoping assumed the ‘Second Generation’ leadership. Deng’s ideology was ‘socialism with Chinese characteristics, a clear departure from the ‘class struggle’ enunciated by Mao. After Deng’s demise in 1997, Jiang Zemin emerged as the ‘core’ of the ‘Third Generation’ leadership and adopted a collective leadership approach. He was the architect of the ‘three represents’ ideology (san ge daibiao); implying that the Communist Party should be representative of advanced social productive forces – economic growth, culture and interests of the overwhelming majority of the Chinese people – under new historical conditions. His successor Hu Jintao, representing the ‘Fourth Generation’ Leadership, followed a similar model, professing the concept of ‘scientific development and harmonious society’. To take on the mantle of the ‘Fifth Generation’ leadership, Xi Jinping was picked as the consensus candidate.
Singapore’s late elder statesman Lee Kuan Yew had described Xi Jinping as a person who had a soul of iron and compared him with the likes of Nelson Mandela. After taking over the reins of power in 2012, Xi moved quickly to consolidate power and project the image of a strongman. Over the last five years, he has established himself as the “core” leader and strengthened his hold on the Party and the PLA, the two key structural pillars of the People’s Republic.
Having famously stated that “Things must have gone rotten before insects can grow”, Xi initiated an unforgiving anti-corruption campaign. The relentless drive resulted in 278,000 officials facing disciplinary action, including 440 holding ministerial or higher positions in government establishments, ‘state owned enterprises’ and the military. Some of the big names caught in the anti-corruption campaign were:
Zhou Yongkang, a former security czar and member of the apex ‘Politburo Standing Committee’ (PSC),
Bo Xilai, Member of the Politburo and Party Secretary Chongqing,
Generals Guo Boxing and Xu Caihu, Vice Chairmen of the Central Military Commission (CMC), the highest military body.
The anti-corruption campaign also saw the elimination of potential rivals, specifically those belonging to factions not aligned with Xi. Cleaning up the system remains a work in progress with two more senior most Generals being implicated recently.
The Party Congress is a five yearly affair, shrouded in secrecy and preceded by intense back room parleys. In the just concluded week long 19th Party Congress, Xi has further strengthened his iron grip over the power levers, specifically in the Party’s policy making structure, and emerged as China’s most powerful leader after Mao. Having been re-elected for a second five year term, he is apparently set to call the shots well beyond 2022, since the new PSC has no chosen successor to be groomed, which is a glaring shift from the Party’s well established tradition during the last two decades. Two probables – Hu Chunhua (Party Chief Guangdong Province) and Chen Miner (Party head of Chongqing City and Xi’s protégé tipped to be his successor) did not make it to the PSC, a pre-requisite for eventual emergence as Party Secretary General.
Xi’s Grand Strategy
The enshrining of “Xi Jinping Thought for New Era Socialism with Chinese Special Characteristics” in the Party constitution as a guiding principle puts him in the league of Mao and signals the further cementing of his power base. Henceforth, any criticism of Xi’s policies will be deemed as an attack on the Communist system itself.
To realise his ‘China Dream’ (fuxing – restoration), which envisions a ‘powerful and prosperous’ China, Xi unfolded his grand design while presenting his report on the opening day of the Party Congress at the Great Hall of the People. He referred to China entering a ‘New Era’ marked by social contradictions. To this end, Xi has propounded the policy of ‘striving for achievements’ (fenfa youwei) and advocating a greater Chinese leadership role in world affairs. This is an obvious departure from the strategy that Deng had advocated, namely, ‘maintain low profile and bide for time’ till China completes its peaceful rise, which was followed scrupulously thus far.
To translate his ‘China Dream’ into reality, Xi outlined the ‘twin centenary objectives’: to become a ‘fully modern’ economy and society between 2020 and 2035; and acquire ‘great power’ status by 2050, coinciding with the centenary of the foundation of the PRC. Undoubtedly, Xi envisions China as a key player in shaping the new global order with Chinese characteristics. His grand strategy is in consonance with the Chinese strategic culture of ‘thinking deep and far’, i.e., taking a holistic and long term perspective.
Ramifications
Today, USA is conflicted about its global role, with President Trump advocating an ‘America First’ policy. Russia under Putin is still in delusion about Cold War symmetry. Xi, on the other hand, has enunciated a clearer strategy for China. As evident from his speeches, he has articulated the idea of a new type of great power relationship based on parity in US-China relations. Now with the stature of a paramount leader, Xi is expected to pursue assertive diplomacy in restructuring the international system whose underlying rules will be increasingly framed by China. Major projects like the Belt Road Initiative (BRI) and Maritime Silk Route (MSR) are means for promoting the objective of a ‘community of shared future’; part of Beijing’s new peripheral diplomacy. This will also enable China to leverage its Comprehensive National Power (CNP) to pursue core national strategic interests.
Xi stated in his speech on 18 October that China would strive to resolve disputes through dialogue but will not compromise on national sovereignty. He has begun his second term by exhorting the 2.3 million strong PLA to be combat ready and focus on ‘how to win wars’. China’s official stated position on the integration of claimed territories with the motherland does not preclude the use of force. For India, China under a powerful autocratic leader does not augur well, given the past record. The 1962 War and stand-offs in 1967 and 1987 occurred when Mao and Deng reigned supreme. The recent face-offs at Depsang, Demchok and Doklam have all taken place during Xi’s tenure. India will have to be prepared to counter China’s growing assertiveness and be wary of the latter’s strengthening nexus with Pakistan.
Xi today rides the Dragon which is externally strong but internally fragile. As political reforms are not on Xi’s agenda, it is economic growth that is the key to translate his dream into reality. There is scepticism about the sustainability of China’s current economic model, given signs of slowing down. Therefore, some tough reforms are inevitable in the future which are likely to lead to social turbulence.
At the beginning of his first term five years back, Xi had stated that one has to be strong to forge iron. Accordingly, he systematically went about centralising power and pushing through the process of consolidation ruthlessly. Xi’s strategy to catapult China to the status of a superpower in the next three decades has no precedence, both in terms of enormity and scope. Lee Kuan Yew had stated that the sheer size of China’s displacement meant that the world has to find a new order. Time has come for the global polity to take note of Xi’s grand design as he flags off China for a ‘long march’ to reshape the world order.
Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.
What the Inclusion of BRI in the Chinese Constitution Implies
Jagannath P. Panda
November 07, 2017
The inclusion of the Belt and Road Initiative in the Charter of the Communist Party of China indicates that it is not merely an economic policy but rather a ‘political project’.
The recently concluded 19th National Congress of the Communist Party of China (CPC) amended the Party’s Constitution to include the promotion of the Belt and Road Initiative (BRI) as one of the major future objectives. This has been seen as an “unexpected” development in Beijing’s political practice in some quarters.1 The amended constitution emphasises that China would work closely with the international community for “shared interest” and “shared growth” through the pursuit of the BRI.2 The use of phrases such as “shared growth” and “shared interest” is nothing new in Chinese official parlance and may look superfluous. But the BRI’s inclusion in the CPC’s amended Constitution is a significant development since the international community mostly views the initiative as an economic strategy that is linked to China’s external engagement policy, and less of a “political” proposition. No matter how minor this amendment might appear to be, it signifies a ‘Chinese state strategy’ in the making, both in the domestic and international contexts.
Past National Congresses have also witnessed amendments to the Party’s Constitution. From the first amendment in 1982, the CPC Constitution has been amended six times before this, each of which brought about changes to the party’s governing principles and functioning style, and adding new leadership thoughts in the process. A similar pattern can be seen in the 2017 amendments as well. By acknowledging Xi Jinping’s strong leadership, the amended Constitution emphasises the importance of Communism in China and how the Communists have progressed smoothly since the 18th National Congress under the guidance of Comrade Xi Jinping as “chief representative”.
Xi’s flagship thought of “Socialism with Chinese Characteristics for a New Era” has also been entered into the Constitution, essentially implying that China would denounce the Western model of democracy and would like to persist with a system that draws its inspiration from Marxism-Leninism along with Mao Zedong’s thought and Deng Xiaoping’s theory and other established principles. The naming of Xi Jinping along with his thought was one of the highpoints of the 19th National Congress, for it elevated Xi’s position as a strong leader equivalent to Mao Zedong and Deng Xiaoping. Both Jiang Zemin and Hu Jintao failed to secure the distinction of having their name mentioned alongside their thoughts in the CPC constitution, even though their principal thoughts do figure in constitution. In fact, in the Communist system, naming a particular leader’s thoughts is a symbolic gesture and signifies his or her leadership persona.
Likewise, the reference to the BRI in the Constitution was another big recognition for Xi Jinping himself since it was primarily known as his project. Further, the inclusion of BRI in the constitution signifies that it is a long-term national project that will continue to be pursued even if Xi were to step down from the presidency in 2022. (But there is speculation that Xi might continue to hold power as the Chairman of the Central Military Commission (CMC) and perhaps as the general secretary of the Party beyond 2022, the two most important positions that really influence the Party’s supervisory process in China’s political structure.) Moreover, since its formal announcement in 2013, BRI has primarily been seen as Xi’s “leadership” project. By naming the BRI in the CPC Charter, China has placed more policy weight on the initiative and offered it a legal sanctity. Further, its inclusion in the Charter reiterates the fact that the BRI is not merely an economic policy but rather a ‘political project’ that Beijing would like to pursue as part of its national developmental programme.
At the same time, the constitutional amendment links BRI with China’s aspiration to ‘build a community of shared interest’ and to achieve “shared growth” through “discussion and collaboration”. This implies the leadership’s ambition to shape the world order through the progress and success of BRI. On the practical side, this implies China’s determination to further promote BRI internationally. China, under Xi’s leadership, has spent enormous resources and energy to promote this flagship initiative since 2013 when Xi formally introduced the initiative to the outside world.
If Xi’s first tenure were to be seen as the ‘promotional’ phase of BRI, the induction of BRI into the Chinese constitution coinciding with the start of his second term as President would imply the beginning of its second ‘execution’ phase. In fact, to launch the execution plan, Beijing convened a forum in May 2017 which witnessed the attendance of 70 heads of international organisations, representatives from 130 countries and 29 national leaders. Releasing a “List of Deliverables” document during the forum, China emphasised the priority areas – policy, infrastructure, trade, financial and people-to-people connectivity – of the BRI.3
The execution of BRI concerning these priority areas is, however, an uphill task. Domestically, the initial promotion and execution of BRI was carried out quite non-systematically. A number of provinces were initially offered a free hand to promote BRI and to sign deals abroad. By inducting BRI into the constitution, China has made it a procedural feature, offering more power to the central government. Earlier, provincial governments aimed to implement BRI as part of their five-year plans. For instance, Xinjiang and Guangxi from Western China were looking to promote infrastructure and trade connecting routes as priorities with the neighbouring Central Asian region. And the targets of Fujian, Guangdong and Shanghai from China’s eastern coastal regions prioritised foreign trade, shipping and logistics and e-commerce while promoting further “opening up”. Moreover, the induction of BRI into the constitution exerts the central leadership’s political control over the provinces since power struggles between different provinces and between the centre and the provinces area known issues in China. It may be recalled that due to his strict anti-corruption drive, Xi Jinping faced political opposition from various quarters and their business communities in various provinces, mainly in Hunan, Gansu, Guangxi, Chongqing and Beijing. 4
The amendment clubbing BRI with “shared interests” and “shared growth” through “discussion and collaboration” elucidates the foreign policy intent that Beijing attaches to its external engagement policy. That means, Beijing may like to employ a more serious approach for convincing the international community to formally join the BRI, and sign agreements that would be beneficial to China and the outside world. This would further imply that China would pursue a more ‘purposeful’ external engagement policy where the top-down directives of the CPC would exert more pressure on Chinese banks, state-owned companies, private companies and business operators to promote investment decisions abroad that will reflect Beijing’s strategic objectives. The performance of the state-owned companies and private companies in promoting the BRI abroad has been under review for some time now. Beijing is slowly implementing a strict capital control mechanism to finance projects abroad under the BRI through different categories.5
In terms of foreign policy, China would like to employ a more consultative process to execute BRI deals, through “discussion and collaboration”. Beijing would be pursuing this consultative process from a position of strength as the world’s second-largest economy. Foreign exchange reserves of US$ 3.1 trillion are likely to enable China offer deals which many smaller economies will find hard to resist or ignore. In addition, the constitutional amendment implies that China is still counting on a set of countries that are yet to offer open or full support to the BRI or have expressed reservations about participating in the initiative.
Both the United States and Japan sent representatives to attend the BRI summit in May 2017, but neither is yet to offer full support for the initiative. Also, Beijing has not completely given up hope of gaining India’s support for the BRI. The recent Doklam border standoff and rising competition on various issues between the two countries may not really encourage China to vest too much hope on India. But the idea of promoting a “forward looking constructive” relationship between China and India, as discussed between Xi Jinping and Narendra Modi during the Xiamen BRICS summit in 2017,6 is not entirely a proposition outside the purview of the BRI.
To sum up, the inclusion of BRI in the CPC constitution was a deliberate political move. The BRI, with a proposed US$900 billion investment,7 is undoubtedly an initiative with global scope that is moreover closely linked to China’s future. Xi, in his speech to the National Congress, acknowledged the importance of BRI for the future of the Chinese economy. Stressing BRI as a “priority”, he emphasised on opening China further to the outside world and encouraged an equal emphasis on “bringing in” and “going global” in order to promote stable engagement with the international community. This implies that China’s external engagement policy will be more BRI-centric in the years to come. Nationally, the inclusion of BRI in the CPC charter was a historic moment for Xi Jinping personally. If Mao Zedong is remembered as the founding father of the People’s Republic of China (PRC) and Deng Xiaoping for his “Reform and Opening-up” policy which transformed China into what it is today, Xi Jinping will certainly be remembered for his Belt and Road policy in the years to come.
Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.
2.Resolution of the 19th National Congress of the Communist Party of China on the Revised Constitution of the Communist Party of China, October 24, 2017, at http://news.xinhuanet.com/english/2017-10/24/c_136702726.htm (accessed on November 4, 2017).
6. Transcript (uncorrected) of Media Briefing by Foreign Secretary in Xiamen on Prime Minister’s Bilateral Meeting with Xi Jinping, President of China on the sidelines of BRICS-2017 (September 05, 2017), Ministry of External Affairs: Government of India, September 5, 2017, at http://mea.gov.in/media-briefings.htm?dtl/28925/Transcript_uncorrected_o... (accessed on November 6, 2017)
Fatah – Hamas Reconciliation and Prospects for the Elusive Palestinian Unity
Md. Muddassir Quamar
November 03, 2017
On October 12, 2017, Fatah and Hamas, the two dominant factions in Palestinian politics, signed a reconciliation agreement in Cairo to end their decade-long conflict.
On October 12, 2017, Fatah and Hamas, the two dominant factions in Palestinian politics, signed a reconciliation agreement in Cairo to end their decade-long conflict. Calling for the implementation of their previous accord signed in Cairo in May 2011, the latest agreement lays down the steps that will eventually lead to a fully functional Palestinian Authority (PA) and an elected Palestinian Legislative Council (PLC). The agreement lays down six conditions that should be fulfilled not later than a year from the date of signing. These are:
formation of an interim national unity government not later than December 1, 2017;
establishment of a committee to resolve all issues pertaining to the staff of the Hamas government in the Gaza Strip;
bringing the Gaza Strip under the complete control of the Palestinian Authority and finalization of the related modalities by November 1, 2017;
Palestinian Authority assuming control over security in the Gaza Strip including the manning of the Rafah border;
convening of a meeting in Cairo in the first week of December to assess implementation of all the agreed upon matters; and,
a meeting on November 14, 2017 of all Palestinian factions signatory to the 2011 Cairo deal to discuss all its clauses.
The October 12 agreement between Fatah and Hamas is the latest in a series of reconciliation attempts going back to 2005. The rupture between Hamas and Fatah began at the time of the signing of the Oslo Accords in 1994, which Hamas refused to accept since it was tantamount to the recognition of Israel. Over time, this essential difference in their respective approaches toward Israel deepened the division in Palestinian politics and even led to occasional armed confrontations. But in the wake of the Al-Aqsa intifada, Egyptian mediation led to Fatah and Hamas signing the Cairo Declaration in 2005, which called for unity among the Palestinian factions and legislative elections to lead the Palestinian Authority.
Subsequently, elections to the PLC were indeed held in January 2006. Hamas emerged as the surprise winner with a 44 per cent vote share and 74 seats in the 132-member PLC, and formed a government led by Ismail Haniyeh in March 2006. However, Israel, the US and the Middle East Quartet (United Nations, the United States, European Union and Russia) refused to recognize the Hamas-led government because of its past terrorist acts and its refusal to disarm. Due to international pressure and Fatah’s unwillingness to yield full control of the Palestinian Authority, the Hamas-led government was rendered dysfunctional, which in turn created widespread chaos. Despite several reconciliation efforts, including the February 2007 Mecca Agreement that mandated an end to violent Palestinian infighting and the formation of a national unity government, the situation did not improve. On the contrary, the differences between Hamas and Fatah erupted into a full-fledged civil war by late 2006 and eventually, amidst violent confrontations, Hamas took control of the Gaza Strip in June 2007. This led to a split in Palestinian Authority, with the Fatah-led PLO in control of the West Bank and Hamas establishing its rule in the Gaza Strip. Since then, various attempts at reconciliation, mediated mainly by Egypt and Qatar, have failed principally due to Hamas’s refusal to recognize Israel as well as disarm.
While previous attempts at reconciliation failed, the situation this time around appears a little more favourable due to three factors. Firstly, Hamas, under pressure from various quarters, has shown an inclination to adopt a more pragmatic approach towards the Palestinian national struggle. The clearest sign of this so far has been the issuance of a new Hamas charter on May 1, 2017, which states that “Hamas considers the establishment of a fully sovereign and independent Palestinian state, with Jerusalem as its capital along the lines of the 4th of June 1967, with the return of the refugees and the displaced to their homes from which they were expelled, to be a formula of national consensus.” This is a major departure from Hamas’s rhetoric of the land of Palestine as that lying between the River Jordan and the Mediterranean Sea. This change in posture has occurred because Hamas is losing support both internally and externally. Domestically, Hamas has failed to resolve the economic crisis facing the Gaza Strip, faltered in the democratization of local administration and adopted an authoritarian attitude towards internal dissent. The number of executions under the Hamas government in Gaza has increased exponentially. For example, according to a May 2015 Amnesty International report,1 23 Gazans, accused of collaboration with the enemy, were tortured and summarily executed by Hamas operatives during July-August 2014. Hamas has also been accused of using “human shields” during the three conflicts with Israel since December 2008. It has also been accused of committing war crimes and crimes against humanity during its confrontation with Israel. Moreover, its inability to provide able governance in the Gaza Strip and failure to pay salaries to government staff has also undermined its position on the domestic front.
At the same time, Hamas’s external policies, especially after the outbreak of Arab Spring, has caused the shrinking of its regional support base. Among the countries that extended support to Hamas in terms of financial aid and training its armed militia until 2011 were Iran and Syria. However, after the outbreak of the Syrian civil war, Hamas made a strategic miscalculation by choosing to take the side of the Islamist opposition and committed itself to opposing the Bashar al-Assad regime. This placed it at odds with Iran, which not only declared support for Assad but also intervened in Syria in support of the beleaguered regime, and led to the burning of its bridges with Tehran. Hamas made a similar mistake in the case of Egypt. After the fall of Mubarak (February 2011), Hamas forged close cooperation with the Mohammed Morsi-led Muslim Brotherhood government (June 2012). And even after the Egyptian military dismissed the Morsi government and assumed power, Hamas failed to promptly distance itself from the Brotherhood. This upset not only the Abdel Fattah El-Sisi regime in Egypt but also the regimes in Arab Gulf countries such as Saudi Arabia and UEA which preferred the pre-Arab Spring status quo in Egypt. Even countries such as Turkey and Qatar, which have continued support for Hamas, have become circumspect due to mounting pressure from regional heavyweights including Saudi Arabia, Egypt and UAE to scale down such support.
Secondly, the fast changing geopolitical situation in the Middle East has put countries such as Israel, Egypt and Saudi Arabia under pressure due to growing Iranian influence. Since 2011, Iran has considerably enhanced its military and strategic presence in Iraq, Syria and Yemen. Further, it has increased its influence in Lebanon and has emerged as a leader in the fight against the Islamic State in Iraq and Syria (ISIS). In contrast, Saudi Arabia, which sees a resurgent Iran as a major threat, has been facing domestic and external challenges. Internally, Saudi Arabia has struggled with the economic slowdown due to the crash in international oil prices, the unrest in its Shia-dominated Eastern Province, growing threat from radicalism and continued popular demand for socio-political reforms. At the same time, it has also faced reverses externally due to ill-advised policy choices in Iraq, Syria and Yemen. Even its decision (together with UAE, Egypt and Bahrain) to boycott Qatar has only worked to strengthen the latter’s resolve to pursue an independent foreign policy and pushed it to the verge of joining hands with Iran on regional issues. Egypt too faces serious internal problems due to continued political instability, growing threat from radicalism and ISIS, unending economic woes and a restive population. And its regional influence has diminished because of inability to maintain primary position in Arab affairs.
Both Egypt and Saudi Arabia understand the significance of the Palestinian issue in these circumstances. A renewed Israeli-Palestinian peace process will divert attention, even if temporarily, from internal problems confronting them. Any breakthrough, howsoever unlikely, will enhance their regional status. Hence, Egypt and Saudi Arabia, along with the UAE, find strategic benefit in putting pressure on the Palestinian factions to end infighting, put their house in order and negotiate with Israel. There is also a convergence of interests between Israel and Arab Gulf countries due to their common threat perceptions vis-à-vis Iran and radical Islamism. In this situation, a positive development relating to the Palestinian issue could divert attention from other issues and provide them a strategic advantage. Moreover, Hamas’s relations with Iran has come under strain because of its anti-Assad position in Syria and it is hard-pressed for international support, which may compel it to change its hard-line attitude on some issues including allowing the Palestinian Authority to take control of the Gaza Strip.
Thirdly, President Donald Trump has shown significant interest in reviving the Middle East peace process. He has individually met the leaders of major stakeholder countries including Israel, Palestine, Jordan, Egypt and Saudi Arabia. In addition, he has appointed his son-in-law Jared Kushner as special envoy for the Middle East and chose to visit Saudi Arabia and Israel during his first international trip. Even though the chances of a revival of the peace process remains grim, there are indications that Trump’s faith that Saudi Arabia and Egypt would be able to exert pressure on the Palestinian factions has borne fruit in terms of bringing them to the negotiating table. While the Egyptian role in mediating between Hamas and Fatah has been evident, Saudi Arabia and UAE have extended support to this effort and appear inclined to establish contacts with Israel. Riyadh has also been instrumental in the re-adoption of the 2002 Arab Peace Initiative by the Arab Summit at its meeting in Amman in March 2017. Though not significant if seen individually, all these dots viewed together signal a possible revival of the peace process.
Given the step-by-step approach adopted in the latest attempt at Fatah-Hamas reconciliation and the interplay among these three factors, the chances of success of the latest reconciliation attempt might be higher. The measured international reaction, notwithstanding the American and Israeli rejection on account of Hamas’s refusal to disarm, bodes well for the reconciliation deal. A reconciliation between the Palestinian factions is not only important for Israel and Palestine but also for regional players including Saudi Arabia and Egypt. Trump too has shown enthusiasm for bringing the peace process back on track. The stakes are even higher for the Palestinian national movement because each time the peace process fails, it enhances the security risk not only for the Palestinian people but also of Arab regimes. Nevertheless, given the intractable nature of the conflict, and the domestic political dynamics in Israel and Palestine, it is too early to vest great hope on the latest reconciliation bid.
Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.
Trump’s new policy statement on Iran has enveloped the UNSC-approved Joint Comprehensive Plan of Action in a shroud of uncertainty that could lead to further instability in conflict-ridden West Asia.
US President Donald Trump announced a new Iran strategy on October 13, 2017. An essential element of the new strategy was the decision not to re-certify Iranian compliance with the provisions of the Joint Comprehensive Plan of Action (JCPOA) — negotiated by the Barack Obama administration along with the other permanent members of the United Nations Security Council (UNSC) and Germany in July 2015. The US President was required to certify every 90 days that continued sanctions relief pursuant to the JCPOA was in the national security interests of the United States, that Iran was implementing the JCPOA and not in material breach of it or pursuing covert nuclear activities. This was in tune with the provisions of the Iran Nuclear Agreement Review Act (INARA) of May 2015. Trump had previously given the certification twice after taking over as president – in April and July 2017.
Divide within the Trump Administration
Even prior to becoming president, Trump labelled the JCPOA as the ‘worst deal ever’ and vowed to dismantle it if he got elected. At an American Israel Public Affairs Committee (AIPAC) event in March 2016, for instance, Trump had insisted that his ‘number one priority is to dismantle the disastrous deal with Iran’. In contrast, General James Mattis, Trump’s Defense Secretary, had noted in an April 2016 speech that while the JCPOA was an ‘imperfect arms control agreement’, it was ‘not completely without some merit’. Mattis, along with some other senior cabinet members of the Trump administration, continued to hold such favourable views of the Iran nuclear deal even January 2017. Secretary of State Rex Tillerson, for instance, agreed during a press briefing on September 20, 2017 — in the aftermath of a ministerial-level meeting of the P5+1 countries in New York – that Iran was in ‘technical compliance’ with the JCPOA. Earlier, on August 1, 2017, he had admitted to ‘differences of views’ on the JCPOA with President Trump. And after Trump’s October 13 statement, Tillerson noted in an interview to CNN that although Iran had committed a ‘number of technical violations’, it subsequently ‘remedied’ those violations, thus bringing it back into ‘technical compliance’.
The Charges against Iran
Trump’s October 13 statement followed a National Security Council led inter-agency review of the JCPOA launched by the administration in mid-April to evaluate whether continued sanctions relief pursuant to the JCPOA was ‘vital to the national security interests of the United States’, given that Iran was a ‘leading state sponsor of terror’. Administration officials (like US Ambassador to the UN, Nikki Haley) as well as analysts critical of the deal highlight Iran’s ‘violations’ – the possession of quantities of heavy water in excess of those prescribed by the JCPOA, the maintenance of more numbers of advanced IR-6 centrifuges than allowed, concerns that Iran might not provide access to military sites where nuclear-related activities could have taken place, among others.
Other analysts however note that such criticisms ‘omit context and perspective’, pointing out that Iran briefly exceeded the limits on heavy water production twice in 2016 (February and November) and, on both occasions, the issue was amicably resolved fairly quickly. In his policy statement, Trump charged that Iran was not complying with all the provisions of the deal and highlighted the above two occasions when Iran produced more heavy water than permitted under the JCPOA. Those two violations, which happened in 2016, did not prevent Trump from certifying that Iran was in compliance twice in 2017.
Trump also alleged that Iran was placing restrictions on the work of the inspectors of the International Atomic Energy Agency (IAEA), the sole agency involved in ensuring that Iran complies with the terms of the JCPOA. Reports however note that Iran has allowed over 400 IAEA inspections, and over 80 short-notice inspections, to various parts of its nuclear programme. The IAEA moreover has daily access to Natanz, the only location where Iran is permitted to enrich uranium, for nearly 15 years, apart from many other significant transparency measures.
Trump however insists that Iran was reluctant to give IAEA inspectors access to military installations which were part of Iran’s ‘clandestine nuclear weapons programme’. While Iran has said it will not permit IAEA access to ‘sensitive’ military sites, the JCPOA has provisions to seek such access from Iran, and the P5+1 will have to provide the reasons for seeking such access. The JCPOA also contains provisions to resolve any contentions relating to such access issues, via the mechanism of the Joint Commission. Without invoking these provisions (and information if any regarding such access requests being not in the public domain), Trump in his October 13 statement has charged Iran with ‘multiple violations of the agreement’.
The most significant charge that Trump lays at Iran’s doorstep is that it ‘is not living up to the spirit of the deal’. Tillerson argues that Iran is not fulfilling the ‘expectations of the agreement’ that it will play a positive regional role as a result of the JCPOA, while admitting at the same time that the agreement ‘set aside, obviously, a serious threat to the region …’ Trump flags Iran’s activities from Syria to Yemen as destabilising the region and in direct opposition to the terms of the Iran deal, which, in his view, was supposed to contribute to ‘regional and international peace and security’.
In the first paragraph of its Preface, the JCPOA notes that the P5+1 ‘anticipate that full implementation (emphasis added) of this JCPOA will contribute to regional and international peace and security’. Trump and his officials therefore surely cannot justifiably lay the blame for lack of progress towards regional and international peace and security at the doors of the 10-year JCPOA which is only in its second year of implementation. More importantly, the JCPOA was only designed to contain the threat posed to regional and international peace and security arising out of Iran’s nuclear concerns.
Going Forward
Trump announced a tightening of sanctions on the Islamic Revolutionary Guard Corps (IRGC) and vowed to take measures in consort with the US Congress and America’s allies to prevent Iran from developing an inter-continental ballistic missile, and address concerns emanating from the ‘sunset’ clauses of the deal which gradually remove restrictions on Iran’s nuclear programme. Earlier, in February 2017, the administration had imposed sanctions on 25 individuals and companies connected to the IRGC-Qods Force (QF) and the missile programme in the immediate aftermath of Iran’s test of a 1000 kilometre range ballistic missile on 29 January—its first missile test after Trump took over.
Tillerson argues for the imperative need to negotiate a ‘secondary’ agreement that would seek to address concerns emanating from such Iranian activities relating to its missile programme and its regional role, issues which are not dealt with by the nuclear-specific JCPOA. It is not certain how such a process would begin or shape up, with the other members of the P5+1 expressing concern at Trump’s October 13 policy statement.
Further, Iran was under UNSC sanctions between December 2006 and July 2015, and concerns regarding Iran’s nuclear programme were shared by all of Iran’s negotiating partners. But the same does not hold true, for instance, on issues pertaining to Iran’s regional role. Iran meanwhile has been careful in fulfilling its end of the bargain until now, knowing fully well that a violation of the JCPOA provisions would lead to a re-imposition of the punitive sanctions measures which affected its economy quite adversely.
Now the focus has shifted to the US Congress and the possible contours of the legislative steps it could take in tune with the INARA provisions. Trump’s decision not to certify Iranian compliance could meanwhile lead to the increased politicisation of IAEA’s safeguards implementation activities in Iran, with negative consequences for the health of the JCPOA mechanisms designed to deal with such issues. The IAEA’s ability to provide a ‘broader conclusion’ that all nuclear activities in Iran are for peaceful purposes — a possibility the JCPOA alludes could occur in eight years from Implementation Day or even earlier — could subsequently be severely impacted. Trump’s policy statement has enveloped the UNSC-approved JCPOA in a shroud of uncertainty that could lead to further instability in conflict-ridden West Asia.
Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.
US-Iran Relations
Africa, Latin America, Caribbean & UN, Nuclear and Arms Control, Eurasia & West Asia
It may be appropriate if the US were to complement its substantial humanitarian and economic assistance by encouraging or even exerting pressure on Myanmar to implement the KAC recommendations.
US Secretary of State Rex Tillerson had undertaken a short visit to Myanmar in mid-November. During the visit, he advised the Myanmar government to investigate the human rights violations in Rakhine and implement the recommendations of the Kofi Annan advisory Commission (KAC) set up by Naypyidaw for obtaining a peaceful, fair and prosperous future for the people of the province. Tillerson also announced an additional tranche of US $ 47 million in humanitarian aid, enhancing total US assistance for Myanmar in 2017 to $ 87 million. It is to be seen how US policy unfolds in the light of Tillerson`s observations, and impacts the situation regarding the Rohingyas still in Rakhine province as well as those displaced and presently sheltered in adjoining countries. The Aung San Su Kyi government’s reaction to Tillerson`s observations has been rather muted with nothing substantive stated in response.
The manner in which the situation in Rakhine is evolving does not engender much hope for the Rohingya community. The recent visit to Naypyidaw of the foreign minister of Bangladesh, the country which is presently sheltering nearly a million Rohingya refugees, to work out some mechanism for reversing the outward migration of the Rohingyas has not heralded any significant change in Myanmar`s policy on the return and rehabilitation of these refugees. An agreement just concluded between Bangladesh and Myanmar on Rohingya repatriation has already run into difficulty, with Myanmar`s minister for resettlement and welfare indicating that only 300 refugees will be taken back per day. There is no clarity regarding their post-return living conditions in Rakhine. And Rohingya outward migration continues. In this backdrop, it is to be observed whether the US government can induce some change in the posture and policies of the Myanmar government towards undoing the physical devastation caused by state-sponsored and ethnic violence targeting the Rohingya in Rakhine, and increase the confidence level of the limited number of the people of this community still living in the area.
The Trump administration could succeed to an extent in cajoling the Aung San Suu Kyi government to start a credible rehabilitation process given the substantial economic assistance that the US is in a position to provide Myanmar, apart from the support it could extend to Myanmar at international fora towards staving off widespread criticism of atrocities against the Rohingya. Since 2012, the US has provided more than US $ 500 million in aid to Myanmar and partnered with member countries at the World Bank and Asian Development Bank to promote critical developmental assistance and investment to the tune of nearly $ 3.8 billion to that country. It may be appropriate if the US were to complement its substantial humanitarian and economic assistance by encouraging or even exerting pressure on Myanmar to implement the KAC recommendations. The exertion of such leverage may be an appropriate method to ensure that Naypyidaw starts the rehabilitation process in Rakhine in a visible and effective manner under some international oversight. In the present circumstances and in the light of past developments, it is doubtful that the Myanmar government would on its own and in an even handed manner execute the rehabilitation process unless goaded to do so by important members of the international community. Tillerson, during his visit, had opined against sanctions on Myanmar, at this stage.
Another factor which apparently will impinge on US policy towards Myanmar pertinent to the Rohingya issue is China’s expanding interest and involvement in the matter. Foreign Minister Wang Yi recently opined that, in the interest of the successful implementation of the `One Belt One Road` initiative, China would like the distraction caused by the Rohingya crisis to be dealt with through a three-step approach. But China has so far neither elaborated upon the contours of the approach nor outlined the course of implementable action to deal with the basic causes of the problem. There is no hint that Beijing has any intrinsic interest towards substantively turning around the miserable plight of the Rohingyas who, today, do not seem to have any prospect of reclaiming even their residential, non-citizen, status in Myanmar. While the Bangladesh government is obviously pleased with the Chinese assertion, it is still to realize the overall import of Chinese policy on alleviating the present and increasing Rohingya refugee burden both politically and economically. The Trump administration, however, may not like to leave Myanmar under increasing Chinese influence.
Chinese mediatory efforts between Bangladesh and Myanmar may lead to some enumeration of the Rohingyas in Bangladeshi camps as well as organized albeit forcible return of some of the refugees to designated camps in Rakhine without providing them the opportunity for engaging in livelihood maintenance activities of their choice and even observing social customs. Such a milieu may suit the present Myanmar government without raising the hackles of the majority Burman community in the affected Rakhine province, and to a limited extent also Bangladesh if a few thousands of refugees can be repatriated to Rakhine. However, with China’s involvement in western Myanmar, a greater inflow of Chinese men and material for development projects and infrastructure in the area would result, with a concomitant increase in Chinese influence on the regime in Naypyidaw. The US government will have to adroitly craft its policy on Myanmar and the Rohingya issue so that it is able to contend with the burgeoning Chinese influence, enhance its stake in Myanmar`s socio-economic development and alleviate the plight of the Rohingyas from a humanitarian angle.
Post the Tillerson visit and the fact-finding tour of a Congressional delegation led by Senator Jeff Merkley, the Trump administration seems to have hardened its posture on Myanmar`s handling of the Rohingya crisis. Tillerson`s official statement from the US State Department on 22 November, while indicating support at the UN General Assembly Third Committee and the Security Council for constructive action, has also indicated Washington`s intention to pursue accountability (in Myanmar, of its government and others involved) through US law, including targeted sanctions. Tillerson has conveyed strong observations to the effect that horrendous atrocities against the Rohingyas have taken place, inter-alia describing the situation in northern Rakhine as marked by ethnic cleansing and human rights abuses by Myanmar`s military and local vigilantes, warranting an independent investigation on the happenings and possible targeted sanctions. It may be realistic if the US government were to act decisively through its aid providing mechanism to induce Myanmar to start the rehabilitation process under the KAC framework and international supervision. China may also be brought into such an arrangement so that its scope to charter an independent course on Myanmar, driven exclusively by its economic and strategic interests, are circumscribed. Naypyidaw may be compelled to acquiesce in the process. Such a turn of events may not be inimical to the interests of Bangladesh and India also.
The author is a retired IDAS officer who has served in senior appointments with Government of India and a State Government.
Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.
“Weapons differentiate between Air Forces and Flying Clubs” is an often heard adage. Weapons capability is an integral part of an Air Power matrix. In the last three months, a number of successful indigenous weapons trials in India indicate a positive move in the right direction even if a little late in certain cases and after multiple failures in others. India’s dependence on foreign vendors for weapons and weapon platforms is well known and it is the largest importer of weaponry.
“Weapons differentiate between Air Forces and Flying Clubs” is an often heard adage. Weapons capability is an integral part of an Air Power matrix. In the last three months, a number of successful indigenous weapons trials in India indicate a positive move in the right direction even if a little late in certain cases and after multiple failures in others. India’s dependence on foreign vendors for weapons and weapon platforms is well known and it is the largest importer of weaponry. Importing weapons acts as a stimulant for defence capability but it is short lived owing to severe limitations in terms of quantum (cost factor), quality (technology) and sustenance (maintenance support). Indigenous weapons development is therefore the key to efficient and effective security.
In July 2017, the Defence Research and Development Organisation (DRDO) developed Quick Reaction Surface to Air Missile (QRSAM) was successfully flight tested.1 This was followed by the successful final Development Flight Trials of Astra –the Beyond Visual Range Air to Air Missile (BVRAAM) – against a Pilotless Target Aircraft (PTA) in September 2017.2 On November 3, the indigenously developed light weight Glide Bomb, SAAW (Smart Anti Airfield Weapon), with an effective range of 70 km was tested.3 Then came, after multiple failures, the successful test flight of ‘NIRBHAY’, the Long Range Sub-Sonic Cruise Missile with an indigenously designed Ring Laser Gyroscope (RLG) and a range of over 700 km.4 And finally, on November 22, the most significant development in this class took place when the Indian Air Force (IAF) successfully fired the BrahMos, the world’s fastest supersonic cruise missile, from a Su-30 MKI fighter aircraft. With a warhead weighing 300 kg, this 2.5 tonne missile has an engagement envelope of 400 km. The operationalisation of the BrahMos Air Launched Cruise Missile (ALCM) will significantly bolster the IAF’s combat capability. BrahMos, with a multi-platform and multi-mission role, is now capable of being launched from land, sea and air, completing the tactical cruise missile triad for India.5
Test firing is one of the initial yet significant steps towards the operationalisation of a system. It will take a while before all the above mentioned weapons systems are declared fully operational and inducted for operational deployment. But the die is cast. Once operational, for the first time in India’s history, the armed forces will have a significant share of cutting edge weapons of indigenous origin.
Although already deployed as a ground based and sea based weapons system, the BrahMos ALCM adds a different dimension to combat capability. It converges the advantages of a missile system with the flexibility of air power. A standoff range of 300 to 400 km keeps the mother aircraft outside the lethal zone of all known terminal defence weapons. If need be, the mother aircraft can go deep inside the adversary’s territory with requisite combat support and carry out the attack on target systems hitherto not reachable. In practical terms, with this weapon, the effective range for engaging targets (radius of action) increases by 25 to 30 per cent and the size of engagement zone doubles.6
Carrying out attacks against targets defended by multi-layered air defence weapons systems has attendant risks. Non-stealth aircraft in a ground attack configuration have a large Radar Cross Section (RCS) given the imperative of carrying multiple external weapons. This leads to early detection by adversary surveillance and tracking systems. Besides early detection by the terminal weapon radars, the aircraft configuration imposes a severe limitation both in terms of its speed and manoeuvrability. Unless protected by multiple high powered Electronic Warfare (EW) warning and counter measure systems, there is a high probability that terminal weapons would be able to engage strike aircraft. This leads to either aborted attacks or loss of aircraft. All this can be avoided by carrying out an attack from outside the lethal engagement zone of the terminal weapon systems. For that, an air launched weapon with a range greater than the lethal zone of terminal weapons is required. The BrahMos ALCM is just that. Although BrahMos itself can be intercepted, owing to its relatively smaller RCS and high speed in the range of 2.8 to 3 Mach, interception is much more difficult than intercepting a fully loaded aircraft. This leads to a high assurance level of success of an attack.
Interaction between the primary damage mechanisms of a weapon (like blast, fragmentation or penetration) with the vulnerability of a target system defines the weapon’s effect on target. The amount of explosive in the warhead, the nature and type of casing along with the explosion initiation mechanism and timing determine the nature and extent of damage. The damage caused by each weapon assists in calculating the number of weapons required to achieve the requisite degree of damage on the target system. Owing to its high kinetic energy at the terminal stage, BrahMos has a high penetration potential but subject to the warhead retaining its shape during impact and penetration. The weight of its warhead, which indicates the quantum of explosive carried, indicates that the damage caused by BrahMos would be akin to one 1000-pound bomb. This is a limiting factor. In addition, the weight of attack is relatively low as only one such missile can be carried per aircraft. The low quantity of explosives carried coupled with the fact that one aircraft would be able to carry only one weapon necessitate a high force level. In other words, a very large number of aircraft loaded with BrahMos will be required to neutralise a large target. This can be offset by high weapon delivery accuracy, with a Circular Error of Probability (CEP) comparable to the dimensions of the vulnerable portion of the target around the aiming point or Desired Mean Point of Impact (DMPI).7 Therefore, terminal accuracy attains great significance. An accurate attack can result in damaging the critical sub system to make the target system non-functional and achieve the desired effect. With this size of warhead, sub 10 metre accuracy is ideal for most target systems.8
Three aspects of BrahMos that are still a work in progress are: extending its range, increasing its speed to hypersonic level, and shrinking its size so that three missiles can be carried by a single aircraft. While all three are steps in the right direction, the most significant change that is required is in terms of further enhancing the missile’s accuracy by fine-tuning its terminal guidance. Greater accuracy will actually reduce the number of weapons required to achieve the desired effect on a given target system.
Originally scheduled to be operational by 2012, the BrahMos ALCM is heading to become a reality after a delay of five years. Now is the time to step on the accelerator. Work needs to be carried out on finalising the modification of the aircraft in terms of structure, electrical and avionics, the manufacture of suitable pylons and changes in the weapon to ensure seamless compatibility and communication between the three. Necessary ground handling and support equipment and infrastructure will also have to be defined for storing, servicing, testing, conveying and loading of the weapon. Thereafter, work needs to be initiated with respect to the parallel processing on aircraft fleet modification, pylon manufacture, support equipment and infrastructure and weapon production. This will enable the availability of this unprecedented and game changing weapon delivery capability for operational deployment in adequate strength at the earliest. A similar approach also needs to be followed in the case of the other indigenous weapon systems that have been tested in recent months. These indigenous long range and accurate weapons in the air-to-surface, surface-to-surface, surface-to-air, and air-to-air categories in adequate quantity will partially offset the capability deficiency resulting from the IAF’s dwindling force structure.
Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.
India should invest in creating a competitive solar module sector across the manufacturing chain, from procuring primary resources to the finished product.
Recently, the International Energy Agency (IEA) has acknowledged India would be the fastest growing energy consumer – and market – till 2040. This applies not only to the hydrocarbon sector, but also for renewable energy (RE), as fast-declining costs turn solar and wind energy into the main drivers of growth in the power sector.
What does this mean for India, and more importantly, for its energy security? Poised to be among the top five renewables generators in the world in a few decades, moving up several notches from its current seventh position, will renewables solve India’s energy insecurity? After all, despite having an installed generation capacity of around 303 GW – the fourth largest – more than 300 million citizens are yet to gain access to electricity. At the same time, a growing economy and rising living standards has seen per capita consumption of energy increasing from a below global average – which means that there is room for even more growth! India is also one of the largest growing passenger vehicle markets. Yet, its stagnating domestic oil and gas production has seen import dependency for both growing year-on-year. While low oil and gas prices saw India’s oil and gas bill decreasing despite a rise in import volumes, a combination of OPEC strategy and West Asian geopolitics has led to the price of oil ascending gradually from a low of US $28 a barrel in early 2016 to more than $60 (Brent) currently.
No doubt, oil is not really a major contender for the power sector – except when intermittent power supply compels the use of diesel generators – and here renewables seem to be ruling as prices per unit of solar and wind-based generation are falling rapidly. Prices have dropped from a high of ₹17/unit in 2010 to ₹2.44 per unit by mid-2017 for solar and to between ₹ 3.51 to 5.92 per unit for wind as against coal which stands at around ₹3.20 per unit. With the goal set at 100 GW by 2022, India had ramped up its solar generation capacity to around 13 GW and 32.5 GW for wind by the end of fiscal 2016-17 as against 3744 MW and 17.4 GW, respectively, at the end of 2014-15. 1
That is the good news. But the challenges with regard to energy security remain grave. Much of the reasons lie with skewed policy decisions.
India’s impressive growth of RE generation has led to a vast demand for further growth, which, in turn, has led to huge imports of solar panel modules, mainly because domestically manufactured solar modules were more costly – around 10 to 15 per cent more – than imported ones from China, Taiwan and Malaysia. This led to the Indian government filing a petition for anti-dumping duty on module imports. That, in turn, led to a growing reluctance by solar exporters, particularly from China, Taiwan and Malaysia, to supply modules to India. In fact, around 89 per cent of solar modules used in India in 2016-17 were imported, and it is unlikely that domestic alternatives will be able to fill the gap. Moreover, the price of imported solar modules have increased by almost 12 per cent since the second half of 2017, due to the increased demand in overseas markets as well as a shortage of polysilicon, an important component in solar panels. Given that modules contribute to more than half of the overall cost of a project, the price increase is expected to hike up project costs by 18 per cent, which roughly translates into an increase of around ₹895 million for a 100 MW project.2 In per unit terms, this is expected to see the cost of solar go up to ₹3.50 to ₹4.00.3 With around 10,842 MW of utility-scale solar energy in the pipeline, the price hike is expected to affect project installations as the institutions which provide finance for the sector are showing increasing reluctance to finance projects due to concerns over cost recoveries and debt coverage. Alternatively, it may lead to an increase in the cost of solar power as the price hike is passed on to the customers. Hence, the very reason for the popularity of solar power may be defeated, leading to a fall in generation.
While a case can be made for continuing the import of solar panels, it does not lend itself to enhancing the country’s basic energy strategy of greater energy independence and security. For this, India would have to invest in creating a competitive module manufacturing sector across the manufacturing chain, from procuring primary resources to the finished product.
Manufacture of solar panels and wind turbines depend on access to rare earth elements (REE), which are a special class of 17 elements or minerals that have extensive use across various industries, including computer, healthcare, defence systems and batteries, apart from clean energy systems. As of now, China has the largest reserves of REE and largely controls the market, sometimes even using it as a strategic tool.4 Interestingly, India too has significant reserves of REE. According to some studies, it has the fourth largest reserves after China, the US and Australia. However, despite commencing rare earth mining activities more than five decades ago, India has not leveraged its advantage. A combination of low-cost Chinese production and lack of R&D, including in extraction techniques and facilities for the separation of individual elements from combined elements, has kept the sector from progressing up the value chain.
Taking cognizance of the challenge, the government has initiated a review of requisite policies to provide a fillip to the sector. In August 2017, the Supreme Court directed the central government to revise the 2008 National Mineral Policy by the end of the year and emphasised the need to encourage scientific mining through proper survey and exploration, as well as the need for adopting better mining practices, advancing R&D, and regulation of unauthorised activities. A new committee has been set up comprising representatives of various ministries and industry – keeping in mind the importance of involving the private sector – as well as representatives of organisations such as Indian Bureau of Mines, Geological Survey of India, Niti Aayog and the Railway Board. One of the main focus areas recommended was improved exploration and scoping of minerals, including rare earth and strategic minerals.5
With policies like electrification of the transport sector and sourcing 40 per cent of power requirements from RE, India needs to ensure that it has the necessary primary resources required to power its energy sector if it is to achieve its goal of energy security. No doubt, finding alternatives to low-priced Chinese REE or developing substitutes will take time and investment. But in the current situation, where China controls the global supply of REE and has even begun stockpiling in preparation for future market demand, efforts to diversify the REE supply chain is critical, both from the economic and security perspectives. India is a latecomer in the sector, but with requisite policy initiatives and implementation, it should join the battle for the soon-to-be-more-competitive renewables market.
Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.
The benchmark price could be different from the initial cost estimate because, in many cases, the negotiation stage is reached several years after in-principle approval.
The disputation over the price India will pay for the 36 medium multi-role combat aircraft, the contract for which was signed in 2016, brings into focus the vulnerability of the process of estimating the cost of acquiring defence equipment, many of which are highly complex systems of systems.
The procedure followed by the Ministry of Defence requires the cost to be estimated first at the initial stage of the procurement proposal for the purpose of obtaining approval for starting the tendering process. The process is repeated just before the opening of the commercial offers with a view to determining an up-to-date and more realistic cost – or, the benchmark price – with reference to which a view could be taken by the contract negotiation committee about the reasonableness of the lowest price quoted by a vendor.
The benchmark price could be different from the initial cost estimate because, in many cases, the negotiation stage is reached several years after in-principle approval. But an error at either of these two stages has serious implications. If, for example, the cost of an equipment that can be procured at Rs 500 crore were to be wrongly estimated as Rs 1,000 crore at either of these two stages, a vendor quoting even Rs 900 crore would appear to have made a very reasonable offer.
While the importance of costing cannot be gainsaid, it is arguably the weakest link in the defence procurement process. This has largely to do with the absence of a policy framework as also the fact that the tools and techniques required for application of costing methods to defence procurements are either non-existent or not adequately refined. There is some irony in this, since costing, as a discipline, is fairly developed.
Various government regulations place the onus of ensuring the reasonableness of the cost of procurement squarely on the procuring agency. While some broad guidelines have been prescribed by the Ministry of Finance that can be followed for discharging this responsibility, these guidelines have many loose ends, especially in the context of defence procurements.
The procedures governing capital and revenue procurement in defence broadly refer to three methods of costing: Budgetary Quote (BQ)/Market Survey (MS), Last Purchase Price (LPP) and Professional Officers’ Valuation (POV). Each of these has severe limitations.
The BQ/MS method, for example, is more appropriate for the purpose of initial cost estimation rather than benchmarking. But, more to the point, the budgetary quotes are generally inflated and, therefore, need to be deflated to arrive at a realistic cost. The problem is that there is no standard rule for the deflation factor to be adopted.
The LPP method presents its own problems. Firstly, this method works best if there is a like-to-like comparison between the equipment bought previously and the one for which the cost is to be estimated. Often this is not the case. Therefore, the LPP has to be adjusted to accommodate the difference between the two, which is a challenge in itself.
Even if the previous and proposed purchases of an equipment are comparable, the LPP may still require to be adjusted on account of inflation during the years since the previous contract was concluded. Again, there is lack of clarity on which inflation indices are to be used for this purpose, especially if the system is being procured from abroad and the seller is sourcing the components of the system from a number of other countries. This method cannot anyway be adopted if no LPP is available or if the equipment to be procured is an upgraded version of, or happens to be materially different from, the system for which the LPP is available.
The adoption of the POV method, which is the last resort, is also dependent on the availability of extensive databases and component-wise break down of the system to be procured.
The biggest challenge faced by procurement personnel is to take a call on the extent of variation, with reference to the estimated cost and benchmark price, that can be accepted while negotiating with the lowest bidder. The fact of the matter is that the entire process of costing is ridden with lack of clarity as regards the standard method of costing, if any, as well as the tools and techniques for the application of these methods. The problem is aggravated by the absence of extensive price databases.
The brunt of these difficulties is borne by the Services Headquarters which is where the costing is generally done with or without the help of the cost advisors in the Ministry of Defence. This is a bit unfair, considering that the onus of costing is on the Contract Negotiation Committee (CNC) and not the services alone.
Several steps need to be taken to address the issue of costing. To begin with, there is a need for the Ministry of Defence to standardise the methods and refine the process of costing in defence thus ensuring that the entire acquisition team collectively decides the method to be adopted in each case at the initial stage of cost estimation as well as at the stage of benchmarking before the commencement of commercial negotiations.
While standardising the methods, the ministry could also consider the possibility of adopting the method of deciding on the reasonableness of the commercial offer by seeking its justification from the vendor. It should be possible to adopt this method if the matrix for assessing the reasonableness of the offer is indicated in the Request for Information/Request for Proposal.
It is equally important to consider the possibility of seeking information through the Request for Information (RFI), especially from foreign vendors, relevant for benchmarking, such as the system break down and the inflation indices applicable in the countries from which vendor is likely to source the components.
Standardisation of the costing methods and refinement of the tools and techniques will work only if databases are maintained by the ministry on price and other factors such as inflation indices that impact costing. The Management Information System (MIS) Cell of the Acquisition Wing in the ministry will need to be enabled to take on this responsibility.
The cost and effort required for creating and maintaining these databases could possibly be minimised by making use of the products and tools that are available commercially from external sources which provide continuously updated data on prices of various components of complex defence systems as well as spares, culled out from contracts concluded by other countries.
The use of external sources is permitted by the existing procurement procedure, though probably this provision has hardly ever been invoked. Use of the products and tools available in the market do not carry the risk of the confidentiality of the process being compromised as the costing can continue to be done within the ministry.
Authentic information available from external sources should make it possible for the ministry to also enlarge the scope of the Fall Clause by making the vendor commit to not charging a price that is higher than the price at which the same equipment is sold by him to some other country.
Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.
Crown Prince Salman has been using oil as a tool to further his political ambitions both domestically and internationally, and Saudi Aramco acts as a nucleus around which his ambitions revolve.
Saudi Aramco’s announcement of its first-ever initial public offering (IPO) in early 2017 came as a surprise to many. Being the largest oil company in the world with presumably the largest reserves and lowest production costs, the reasons behind the IPO continue to be of interest. A cursory analysis of the reasons behind the IPO point to the Kingdom’s increasing budget deficit due to the plunge in international oil prices in the wake of weak demand and the shale revolution in the United States. But a deeper probe indicates the IPO’s connection with ongoing attempts to effect a transformation on both the domestic and foreign policy fronts with a view to bolster Saudi Arabia’s position in the region as well as retain its supremacy in the oil market.
In a bid to consolidate power and authority, Crown Prince Mohammed bin Salman has unfurled an array of political, economic and social reforms. His brainchild, Vision 2030, was primarily aimed at diversifying the economy from its over-dependence on oil revenues, privatisation, and making the Kingdom an attractive destination for business and investment. Salman’s emphasis on creating a modern and moderate Islamic country has gained currency amongst the youth, who are facing issues ranging from a deeply conservative society to unemployment. The Crown Prince’s anti-corruption drive, whereby he targeted rivals and tightened his grip, has made him popular amongst the masses and helped him gain access to assets worth billions. Even though the targeting of businessmen and the elite has given rise to concerns amongst investors, Salman is trying to build his reputation as a ruler who favours transparency and accountability that would help legal businesses to flourish. Apart from Vision 2030, several multi-million dollar projects like NEOM, an artificial intelligence-driven city on the Red Sea at an estimated cost of US $500 billion, has been planned to make the Kingdom a completely modern country.
However, the plunge in international oil prices resulted in an economic slowdown both in Saudi Arabia as well as other oil-exporting countries. While Vision 2030 emphasised on weaning the Saudi economy away from oil revenues, falling oil prices have led to a reduction in revenues that adversely affected the economy. That, in turn, pushed the government to effect a policy reversal aimed at increasing oil prices to support the economy in the short and medium terms. Hence, diversifying the Saudi economy away from oil became a policy prerogative, albeit in the long term. The IMF Regional Economic Outlook report for the Middle East and Central Asia notes that Saudi Arabia would need to price its oil at US $70 per barrel in 2018 in order to balance its budget.1 With current oil prices at a two-year high crossing $60 per barrel, the November 2016 OPEC decision to cut oil production has borne fruit, thereby making it possible for Saudi Aramco’s value to rise to around $2 trillion, despite conflicting reports suggesting that Aramco’s value stands at only around US $ 1 trillion.2 Furthermore, the Crown Prince aspires to make the Saudi sovereign wealth fund the largest in the world3 by transferring the ownership of Aramco to the fund along with selling five per cent of Aramco’s shares. It goes without saying that Saudi Arabia would do its best to try and increase global oil prices in order to raise the value of Saudi Aramco as high as possible.
On the international front, Saudi foreign policy priorities have transformed ever since Crown Prince Salman took over the reins of power. His assertiveness in policy decisions has seen an array of proxy wars, including the Qatar blockade, intensification of the Yemen crisis, and the resignation of the Lebanese prime minister, which can all be perceived as part of the Saudi strategy of containing rival Iran. Saudi policy towards Iran also seems to have found resonance in the Trump Administration’s growing hard-line posture towards Tehran. Salman’s decisions are reflective of Saudi interests and the emerging regional alignments against the increasing power and influence of Iran. To prosecute its regional proxy wars against Iran and its supporters, Saudi Arabia would have to ensure the availability of sufficient funds. Even though Crown Prince Salman has the support of the US, the latter’s support is not without a quid pro quo. Trump, in exchange for supporting Salman’s policies in the region, is most likely to exert pressure with respect to listing Aramco’s shares in the New York stock exchange. In addition, Trump wants Saudi Arabia to buy more arms4 from the US. Finally, one cannot also rule out a US-Saudi deal to ensure significantly higher oil prices.
Efforts by OPEC to cut production by 1.8 million barrel per day with a view to propping up prices as well as driving out competition from non-OPEC oil-exporting countries, especially after the shale revolution in the US, are gradually beginning to show results. OPEC is scheduled to meet again on November 30, where its members would most likely decide to continue with the production cuts for another year from March 2018. Even though a supply cut has led to OPEC losing out on the largest markets, including China and India, it has helped in getting oil prices back on track with the support of Russia. Both the US and Russia benefitted immensely in capturing some of the most lucrative oil markets. In addition, rising oil prices would be equally beneficial for all oil-exporting countries.
Even while all of Salman’s efforts are aimed at reducing the Kingdom’s dependence on oil, oil continues to remain the driver of the Saudi economy. Salman has been using oil as a tool to further his political ambitions both domestically and internationally. Hence, Saudi Aramco acts as a nucleus around which all of Salman’s ambitions revolve. Playing out oil politics to become the unquestioned leader in the Kingdom, further Saudi Arabia’s supremacy in the region and attract investments from abroad has been the strategy behind Salman’s political adventures.
Yet, there is no clarity as to the date or the venue of Saudi Aramco’s IPO listing. Saudi Oil Minister Khalid al-Falih mentioned at the Future Investment Initiative held in Riyadh on 24 October that the IPO would take place in 2018.5 Saudi Arabia is also wooing emerging economies like China and India, which are some of the largest importers and consumers of Saudi oil. Interested bidders from these emerging powers could be given preference as they would continue to be huge markets in the future. There are also rumours that Saudi Arabia might think of a private placement of the IPO to China. However, the decision on where to list Aramco’s shares other than in the Riyadh stock market rests with Crown Prince Salman. An international listing would bring in more investors and attractive bids. However, before such a decision is taken, Saudi Arabia has to resolve issues like what details to disclose (especially details regarding Aramco’s crude oil reserves) to buyers and the terms of the IPO.
In times of low oil prices, national oil companies in West Asia are coming under pressure to remain profitable and fulfil their commitments to their respective governments. Saudi Aramco, being the main revenue earner for the Kingdom of Saudi Arabia, has the responsibility to shoulder the financial burden involved in initiating the reforms envisaged by Crown Prince Salman. Thus, Saudi Aramco’s IPO is part of a broader strategy to further the Crown Prince’s regional and global aspirations.
Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.
A long coastline, ports, and availability of airfields all make Odisha a strategic asset that provides considerable leverage for securing India’s national interests and enhancing influence in South East Asia.
The Act East Policy and the intent to develop overland communication linkages through the North-Eastern States for enabling the seamless movement of goods and people between the South and South East Asian regions is a strategic necessity for India. This is because the emerging markets in South East Asia and the economies of strategically located countries like Myanmar, Thailand, Indonesia and Singapore along the Strait of Malacca are on an ascending spiral and have the potential to grow at a faster pace if connected with each other. This is a win-win situation for India because it is likely to transform the security situation in the north-eastern region by accelerating economic growth there. Enhanced Indian interaction with South-East Asian countries may also moderate Indian concerns about China’s influence in that region.
Importance of Bay of Bengal
As regards the maritime dimension of India’s Act East policy, it is important to note that the access to Southern and Western Asia from Eastern and South-Eastern Asia is through the Indian Ocean. India assumes special significance as movement of vessels in the Indian Ocean can be monitored from the Union Territories of Andaman and Nicobar and Lakshadweep. While India has a pivotal role to play in maintaining and ensuring security in the Indian Ocean as a whole, in recent times China has shown active interest in enhancing linkages and influence in the countries of the Indian Ocean littoral. In this regard, an important area of the Indian Ocean, the Bay of Bengal, which is enclosed from three sides by the territories of India, Bangladesh and Myanmar has not escaped Chinese attention. India must wake up to the reality that its Eastern coast needs a different kind of security framework than the Western coast. The growing Chinese interest in Myanmar and Bangladesh, both of which are geo-strategically important as they cover the northern and eastern coastlines of the Bay of Bengal, makes a rethink in this regard imperative to ensure optimal security.
A Special Force
On India’s Eastern coastline, only Vishakhapatnam and Chennai are major ports with an adequate naval presence. The gap between Vishakhapatnam and the easternmost point along the coast is large and there is no viable force to safeguard the intervening area. Further, the vast coastal stretch northwards of Vishakhapatnam remains vulnerable given the absence of an adequate force presence up to Kolkata, which is not a seaport. Here, it must be remembered that although Western Naval Command is located in Mumbai with various Naval/Army deployments along the west coast from Goa to Porbandar-Jamnagar, terrorists still managed to penetrate the maritime security cordon on 26/11.
Given this, in order to adequately guard the vast stretch of the land mass and associated coastline from Vishakhapatnam northward in conjunction with the Navy, Coast Guard and Marine Police of the states, there is a need to place a Rapid Reaction Force (RRF) contingent in the area, which should have amphibious capability as well. This will throw a maritime security arc in the Bay of Bengal to the sea-trade routes from Andhra Pradesh northwards till Myanmar and eastwards towards Thailand till the Strait of Malacca.
Situating Odisha
Odisha assumes special significance in this context. By virtue of its location, the state has a wider ‘line of sight’ covering all the places around the Bay. Unknown to many today, Odisha has had a rich maritime tradition and its geostrategic importance stands inadequately appreciated. The famous ‘Bali Jatra’, being observed with pomp and enthusiasm every year in Odisha during autumn, offers a reminder of the seaward forays of Odia sailor-merchants (called Sadhabas) and the nostalgia about it persists till today.
During the Mauryan era, Emperor Ashoka used Odisha to send out Buddhist preachers to Sri Lanka and to countries of South East Asia. Ashoka’s influence extended from Sri Lanka to the Indonesian islands and even as far as Japan. There were established trade routes connecting Odisha to South East Asian countries. These routes need to be revived. A long coastline, ports, and availability of airfields all make Odisha a strategic asset that provides considerable leverage for securing India’s national interests and enhancing influence in South East Asia. There is also a cultural connect with South East Asian countries that can be revisited and tapped for strengthening the Act East policy.
In addition to its coastline, ports and airfields, Odisha is also rich in mineral resources. Recent years have seen an appreciable infrastructure build-up in the state, the establishment of major steel plants and an oil refinery at Paradip, and the inclusion of Bhubaneswar in the list of the national plan for establishing Smart Cities. Further, Odisha is home to strategic installations such as the Chandipur missile testing range, Abdul Kalam Island, storage of strategic reserves of petroleum, IOCL Refinery at Paradip and steel industries. It must be appreciated that along with economic development, security threats also multiply. The recent terror related activities in the state, especially since 2015, show that Odisha is on the radar of global terrorist groups. Given all this, the presence of active military units carrying out regular training manoeuvres (even if it is for enhanced coastal security) should deter such groups.
The Indian Navy is already engaged in the Sagar project and is planning to raise its security quotient along the West Bengal Coast by building facilities at Tajpur to deal with possible threats emanating from the north and east of the Bay. However, in view of the discussion above, there is a growing need for a military presence in the space between Vishakhapatnam-Andaman and Sagar Project/Tajpur, which can operate in coordination with the Navy and Air Force as a rapid reaction force (RRF). Such a force can focus on physical area domination, protection of possible landing sites, coordination with friendly neighbours and ‘add on’ to the taskforce in the Andaman Islands and greatly consolidate India’s security efforts in the Bay of Bengal. In the background of the recent terrorist action in Bangladesh and subsequent crack-down, the possibility of the migration of such radical elements to the coastal areas of Digha, Chandipur, IOCL at Paradip, Konark, or even Puri cannot be ruled out. Remaining underprepared for such potential threats will only add to our embarrassment if they ensue.
The proposed force contingent must have the capability for beach landing, air transportation and a small detachment of Special Forces for high-risk missions. Accordingly, various components of the task force need to be adequately equipped and trained. As a corollary, such a contingent can also augment the capacity of the National Disaster Relief Force (NDRF) in the region.
Leveraging Odisha’s location
It is time to develop Odisha as a strategically important state and effectively use its location for security, surveillance and domination of the East coast with electronic and physical capabilities of all three services in conjunction with the Coast Guard and the state machinery. The fallout of all this will be enhanced national capabilities in multiple spheres and the provision of an impetus to Odisha’s development.
As regards military training, Odisha provides the best possible menu in terms of types of terrain and weather conditions. While the temperature soars to 48-49 degrees Celsius in summer, in winter the mercury drops to the single digits in the western part of the state. Rivers provide water bodies and the state’s coastline is ideal for amphibious training. The state’s hills, with their jungles, offer the desired level of difficulty for combat orientation.
The shortest aerial route from Delhi to Port Blair passes through Odisha. A dedicated force contingent, as proposed above, will give quality protection to national assets, and help promote the national interest in the neighbourhood. Moreover, the access routes to the Bay of Bengal by any hostile sea-borne elements can be better monitored by such a dedicated joint services task force, which will also provide a launchpad for and synergy to the forces in the Andamans.
On the internal security front, the approximately 475 km-long long coastline will experience better security. It will provide better preparedness for emergencies like the 1999 super cyclone. At the same time, Odisha will also benefit in terms of development of infrastructure such as airfields, surface connectivity and construction of military stations. Needless to add, all this would generate employment opportunities for locals in various projects and boost economic activity.
Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.
Xi envisions China as a key player in shaping the new global order with Chinese characteristics. His grand strategy is in consonance with the Chinese strategic culture of ‘thinking deep and far’
According to Chinese traditional belief, it is the ‘mandate of heaven’ (tianming) that selects an individual to rule. A Confucian idea to facilitate the dynastic cycle, it implied that while good rulers would be allowed to govern with a renewed mandate, the mandate would be revoked in the case of despotic and unjust rulers.
The first Chinese ruler to claim the mandate of heaven was King Wen of Zhou (1050 BCE), a pre- dynastic feudal state in the Wei River Valley. Wen remained a model for many subsequent emperors and politicians. Rival dynasties often used the concept of mandate as a pretext to gain legitimacy for perpetuating political unrest. A case in point was the Qin Dynasty (221-206 BCE) under Shi Huangti, who used it to justify the conquest of all other states, thus unifying China for the first time.
Post the 1949 Communist Revolution, Mao emerged as an autocratic paramount leader of the People’s Republic of China (PRC). His ideology ‘Mao Zedong Thought’, encapsulated in the famous ‘red book’, was enshrined in the party’s constitution. After Mao’s death in 1976 followed by a brief power struggle, Deng Xiaoping assumed the ‘Second Generation’ leadership. Deng’s ideology was ‘socialism with Chinese characteristics, a clear departure from the ‘class struggle’ enunciated by Mao. After Deng’s demise in 1997, Jiang Zemin emerged as the ‘core’ of the ‘Third Generation’ leadership and adopted a collective leadership approach. He was the architect of the ‘three represents’ ideology (san ge daibiao); implying that the Communist Party should be representative of advanced social productive forces – economic growth, culture and interests of the overwhelming majority of the Chinese people – under new historical conditions. His successor Hu Jintao, representing the ‘Fourth Generation’ Leadership, followed a similar model, professing the concept of ‘scientific development and harmonious society’. To take on the mantle of the ‘Fifth Generation’ leadership, Xi Jinping was picked as the consensus candidate.
Singapore’s late elder statesman Lee Kuan Yew had described Xi Jinping as a person who had a soul of iron and compared him with the likes of Nelson Mandela. After taking over the reins of power in 2012, Xi moved quickly to consolidate power and project the image of a strongman. Over the last five years, he has established himself as the “core” leader and strengthened his hold on the Party and the PLA, the two key structural pillars of the People’s Republic.
Having famously stated that “Things must have gone rotten before insects can grow”, Xi initiated an unforgiving anti-corruption campaign. The relentless drive resulted in 278,000 officials facing disciplinary action, including 440 holding ministerial or higher positions in government establishments, ‘state owned enterprises’ and the military. Some of the big names caught in the anti-corruption campaign were:
The anti-corruption campaign also saw the elimination of potential rivals, specifically those belonging to factions not aligned with Xi. Cleaning up the system remains a work in progress with two more senior most Generals being implicated recently.
The Party Congress is a five yearly affair, shrouded in secrecy and preceded by intense back room parleys. In the just concluded week long 19th Party Congress, Xi has further strengthened his iron grip over the power levers, specifically in the Party’s policy making structure, and emerged as China’s most powerful leader after Mao. Having been re-elected for a second five year term, he is apparently set to call the shots well beyond 2022, since the new PSC has no chosen successor to be groomed, which is a glaring shift from the Party’s well established tradition during the last two decades. Two probables – Hu Chunhua (Party Chief Guangdong Province) and Chen Miner (Party head of Chongqing City and Xi’s protégé tipped to be his successor) did not make it to the PSC, a pre-requisite for eventual emergence as Party Secretary General.
Xi’s Grand Strategy
The enshrining of “Xi Jinping Thought for New Era Socialism with Chinese Special Characteristics” in the Party constitution as a guiding principle puts him in the league of Mao and signals the further cementing of his power base. Henceforth, any criticism of Xi’s policies will be deemed as an attack on the Communist system itself.
To realise his ‘China Dream’ (fuxing – restoration), which envisions a ‘powerful and prosperous’ China, Xi unfolded his grand design while presenting his report on the opening day of the Party Congress at the Great Hall of the People. He referred to China entering a ‘New Era’ marked by social contradictions. To this end, Xi has propounded the policy of ‘striving for achievements’ (fenfa youwei) and advocating a greater Chinese leadership role in world affairs. This is an obvious departure from the strategy that Deng had advocated, namely, ‘maintain low profile and bide for time’ till China completes its peaceful rise, which was followed scrupulously thus far.
To translate his ‘China Dream’ into reality, Xi outlined the ‘twin centenary objectives’: to become a ‘fully modern’ economy and society between 2020 and 2035; and acquire ‘great power’ status by 2050, coinciding with the centenary of the foundation of the PRC. Undoubtedly, Xi envisions China as a key player in shaping the new global order with Chinese characteristics. His grand strategy is in consonance with the Chinese strategic culture of ‘thinking deep and far’, i.e., taking a holistic and long term perspective.
Ramifications
Today, USA is conflicted about its global role, with President Trump advocating an ‘America First’ policy. Russia under Putin is still in delusion about Cold War symmetry. Xi, on the other hand, has enunciated a clearer strategy for China. As evident from his speeches, he has articulated the idea of a new type of great power relationship based on parity in US-China relations. Now with the stature of a paramount leader, Xi is expected to pursue assertive diplomacy in restructuring the international system whose underlying rules will be increasingly framed by China. Major projects like the Belt Road Initiative (BRI) and Maritime Silk Route (MSR) are means for promoting the objective of a ‘community of shared future’; part of Beijing’s new peripheral diplomacy. This will also enable China to leverage its Comprehensive National Power (CNP) to pursue core national strategic interests.
Xi stated in his speech on 18 October that China would strive to resolve disputes through dialogue but will not compromise on national sovereignty. He has begun his second term by exhorting the 2.3 million strong PLA to be combat ready and focus on ‘how to win wars’. China’s official stated position on the integration of claimed territories with the motherland does not preclude the use of force. For India, China under a powerful autocratic leader does not augur well, given the past record. The 1962 War and stand-offs in 1967 and 1987 occurred when Mao and Deng reigned supreme. The recent face-offs at Depsang, Demchok and Doklam have all taken place during Xi’s tenure. India will have to be prepared to counter China’s growing assertiveness and be wary of the latter’s strengthening nexus with Pakistan.
Xi today rides the Dragon which is externally strong but internally fragile. As political reforms are not on Xi’s agenda, it is economic growth that is the key to translate his dream into reality. There is scepticism about the sustainability of China’s current economic model, given signs of slowing down. Therefore, some tough reforms are inevitable in the future which are likely to lead to social turbulence.
At the beginning of his first term five years back, Xi had stated that one has to be strong to forge iron. Accordingly, he systematically went about centralising power and pushing through the process of consolidation ruthlessly. Xi’s strategy to catapult China to the status of a superpower in the next three decades has no precedence, both in terms of enormity and scope. Lee Kuan Yew had stated that the sheer size of China’s displacement meant that the world has to find a new order. Time has come for the global polity to take note of Xi’s grand design as he flags off China for a ‘long march’ to reshape the world order.
Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.
The inclusion of the Belt and Road Initiative in the Charter of the Communist Party of China indicates that it is not merely an economic policy but rather a ‘political project’.
The recently concluded 19th National Congress of the Communist Party of China (CPC) amended the Party’s Constitution to include the promotion of the Belt and Road Initiative (BRI) as one of the major future objectives. This has been seen as an “unexpected” development in Beijing’s political practice in some quarters.1 The amended constitution emphasises that China would work closely with the international community for “shared interest” and “shared growth” through the pursuit of the BRI.2 The use of phrases such as “shared growth” and “shared interest” is nothing new in Chinese official parlance and may look superfluous. But the BRI’s inclusion in the CPC’s amended Constitution is a significant development since the international community mostly views the initiative as an economic strategy that is linked to China’s external engagement policy, and less of a “political” proposition. No matter how minor this amendment might appear to be, it signifies a ‘Chinese state strategy’ in the making, both in the domestic and international contexts.
Past National Congresses have also witnessed amendments to the Party’s Constitution. From the first amendment in 1982, the CPC Constitution has been amended six times before this, each of which brought about changes to the party’s governing principles and functioning style, and adding new leadership thoughts in the process. A similar pattern can be seen in the 2017 amendments as well. By acknowledging Xi Jinping’s strong leadership, the amended Constitution emphasises the importance of Communism in China and how the Communists have progressed smoothly since the 18th National Congress under the guidance of Comrade Xi Jinping as “chief representative”.
Xi’s flagship thought of “Socialism with Chinese Characteristics for a New Era” has also been entered into the Constitution, essentially implying that China would denounce the Western model of democracy and would like to persist with a system that draws its inspiration from Marxism-Leninism along with Mao Zedong’s thought and Deng Xiaoping’s theory and other established principles. The naming of Xi Jinping along with his thought was one of the highpoints of the 19th National Congress, for it elevated Xi’s position as a strong leader equivalent to Mao Zedong and Deng Xiaoping. Both Jiang Zemin and Hu Jintao failed to secure the distinction of having their name mentioned alongside their thoughts in the CPC constitution, even though their principal thoughts do figure in constitution. In fact, in the Communist system, naming a particular leader’s thoughts is a symbolic gesture and signifies his or her leadership persona.
Likewise, the reference to the BRI in the Constitution was another big recognition for Xi Jinping himself since it was primarily known as his project. Further, the inclusion of BRI in the constitution signifies that it is a long-term national project that will continue to be pursued even if Xi were to step down from the presidency in 2022. (But there is speculation that Xi might continue to hold power as the Chairman of the Central Military Commission (CMC) and perhaps as the general secretary of the Party beyond 2022, the two most important positions that really influence the Party’s supervisory process in China’s political structure.) Moreover, since its formal announcement in 2013, BRI has primarily been seen as Xi’s “leadership” project. By naming the BRI in the CPC Charter, China has placed more policy weight on the initiative and offered it a legal sanctity. Further, its inclusion in the Charter reiterates the fact that the BRI is not merely an economic policy but rather a ‘political project’ that Beijing would like to pursue as part of its national developmental programme.
At the same time, the constitutional amendment links BRI with China’s aspiration to ‘build a community of shared interest’ and to achieve “shared growth” through “discussion and collaboration”. This implies the leadership’s ambition to shape the world order through the progress and success of BRI. On the practical side, this implies China’s determination to further promote BRI internationally. China, under Xi’s leadership, has spent enormous resources and energy to promote this flagship initiative since 2013 when Xi formally introduced the initiative to the outside world.
If Xi’s first tenure were to be seen as the ‘promotional’ phase of BRI, the induction of BRI into the Chinese constitution coinciding with the start of his second term as President would imply the beginning of its second ‘execution’ phase. In fact, to launch the execution plan, Beijing convened a forum in May 2017 which witnessed the attendance of 70 heads of international organisations, representatives from 130 countries and 29 national leaders. Releasing a “List of Deliverables” document during the forum, China emphasised the priority areas – policy, infrastructure, trade, financial and people-to-people connectivity – of the BRI.3
The execution of BRI concerning these priority areas is, however, an uphill task. Domestically, the initial promotion and execution of BRI was carried out quite non-systematically. A number of provinces were initially offered a free hand to promote BRI and to sign deals abroad. By inducting BRI into the constitution, China has made it a procedural feature, offering more power to the central government. Earlier, provincial governments aimed to implement BRI as part of their five-year plans. For instance, Xinjiang and Guangxi from Western China were looking to promote infrastructure and trade connecting routes as priorities with the neighbouring Central Asian region. And the targets of Fujian, Guangdong and Shanghai from China’s eastern coastal regions prioritised foreign trade, shipping and logistics and e-commerce while promoting further “opening up”. Moreover, the induction of BRI into the constitution exerts the central leadership’s political control over the provinces since power struggles between different provinces and between the centre and the provinces area known issues in China. It may be recalled that due to his strict anti-corruption drive, Xi Jinping faced political opposition from various quarters and their business communities in various provinces, mainly in Hunan, Gansu, Guangxi, Chongqing and Beijing. 4
The amendment clubbing BRI with “shared interests” and “shared growth” through “discussion and collaboration” elucidates the foreign policy intent that Beijing attaches to its external engagement policy. That means, Beijing may like to employ a more serious approach for convincing the international community to formally join the BRI, and sign agreements that would be beneficial to China and the outside world. This would further imply that China would pursue a more ‘purposeful’ external engagement policy where the top-down directives of the CPC would exert more pressure on Chinese banks, state-owned companies, private companies and business operators to promote investment decisions abroad that will reflect Beijing’s strategic objectives. The performance of the state-owned companies and private companies in promoting the BRI abroad has been under review for some time now. Beijing is slowly implementing a strict capital control mechanism to finance projects abroad under the BRI through different categories.5
In terms of foreign policy, China would like to employ a more consultative process to execute BRI deals, through “discussion and collaboration”. Beijing would be pursuing this consultative process from a position of strength as the world’s second-largest economy. Foreign exchange reserves of US$ 3.1 trillion are likely to enable China offer deals which many smaller economies will find hard to resist or ignore. In addition, the constitutional amendment implies that China is still counting on a set of countries that are yet to offer open or full support to the BRI or have expressed reservations about participating in the initiative.
Both the United States and Japan sent representatives to attend the BRI summit in May 2017, but neither is yet to offer full support for the initiative. Also, Beijing has not completely given up hope of gaining India’s support for the BRI. The recent Doklam border standoff and rising competition on various issues between the two countries may not really encourage China to vest too much hope on India. But the idea of promoting a “forward looking constructive” relationship between China and India, as discussed between Xi Jinping and Narendra Modi during the Xiamen BRICS summit in 2017,6 is not entirely a proposition outside the purview of the BRI.
To sum up, the inclusion of BRI in the CPC constitution was a deliberate political move. The BRI, with a proposed US$900 billion investment,7 is undoubtedly an initiative with global scope that is moreover closely linked to China’s future. Xi, in his speech to the National Congress, acknowledged the importance of BRI for the future of the Chinese economy. Stressing BRI as a “priority”, he emphasised on opening China further to the outside world and encouraged an equal emphasis on “bringing in” and “going global” in order to promote stable engagement with the international community. This implies that China’s external engagement policy will be more BRI-centric in the years to come. Nationally, the inclusion of BRI in the CPC charter was a historic moment for Xi Jinping personally. If Mao Zedong is remembered as the founding father of the People’s Republic of China (PRC) and Deng Xiaoping for his “Reform and Opening-up” policy which transformed China into what it is today, Xi Jinping will certainly be remembered for his Belt and Road policy in the years to come.
Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.
On October 12, 2017, Fatah and Hamas, the two dominant factions in Palestinian politics, signed a reconciliation agreement in Cairo to end their decade-long conflict.
On October 12, 2017, Fatah and Hamas, the two dominant factions in Palestinian politics, signed a reconciliation agreement in Cairo to end their decade-long conflict. Calling for the implementation of their previous accord signed in Cairo in May 2011, the latest agreement lays down the steps that will eventually lead to a fully functional Palestinian Authority (PA) and an elected Palestinian Legislative Council (PLC). The agreement lays down six conditions that should be fulfilled not later than a year from the date of signing. These are:
The October 12 agreement between Fatah and Hamas is the latest in a series of reconciliation attempts going back to 2005. The rupture between Hamas and Fatah began at the time of the signing of the Oslo Accords in 1994, which Hamas refused to accept since it was tantamount to the recognition of Israel. Over time, this essential difference in their respective approaches toward Israel deepened the division in Palestinian politics and even led to occasional armed confrontations. But in the wake of the Al-Aqsa intifada, Egyptian mediation led to Fatah and Hamas signing the Cairo Declaration in 2005, which called for unity among the Palestinian factions and legislative elections to lead the Palestinian Authority.
Subsequently, elections to the PLC were indeed held in January 2006. Hamas emerged as the surprise winner with a 44 per cent vote share and 74 seats in the 132-member PLC, and formed a government led by Ismail Haniyeh in March 2006. However, Israel, the US and the Middle East Quartet (United Nations, the United States, European Union and Russia) refused to recognize the Hamas-led government because of its past terrorist acts and its refusal to disarm. Due to international pressure and Fatah’s unwillingness to yield full control of the Palestinian Authority, the Hamas-led government was rendered dysfunctional, which in turn created widespread chaos. Despite several reconciliation efforts, including the February 2007 Mecca Agreement that mandated an end to violent Palestinian infighting and the formation of a national unity government, the situation did not improve. On the contrary, the differences between Hamas and Fatah erupted into a full-fledged civil war by late 2006 and eventually, amidst violent confrontations, Hamas took control of the Gaza Strip in June 2007. This led to a split in Palestinian Authority, with the Fatah-led PLO in control of the West Bank and Hamas establishing its rule in the Gaza Strip. Since then, various attempts at reconciliation, mediated mainly by Egypt and Qatar, have failed principally due to Hamas’s refusal to recognize Israel as well as disarm.
While previous attempts at reconciliation failed, the situation this time around appears a little more favourable due to three factors. Firstly, Hamas, under pressure from various quarters, has shown an inclination to adopt a more pragmatic approach towards the Palestinian national struggle. The clearest sign of this so far has been the issuance of a new Hamas charter on May 1, 2017, which states that “Hamas considers the establishment of a fully sovereign and independent Palestinian state, with Jerusalem as its capital along the lines of the 4th of June 1967, with the return of the refugees and the displaced to their homes from which they were expelled, to be a formula of national consensus.” This is a major departure from Hamas’s rhetoric of the land of Palestine as that lying between the River Jordan and the Mediterranean Sea. This change in posture has occurred because Hamas is losing support both internally and externally. Domestically, Hamas has failed to resolve the economic crisis facing the Gaza Strip, faltered in the democratization of local administration and adopted an authoritarian attitude towards internal dissent. The number of executions under the Hamas government in Gaza has increased exponentially. For example, according to a May 2015 Amnesty International report,1 23 Gazans, accused of collaboration with the enemy, were tortured and summarily executed by Hamas operatives during July-August 2014. Hamas has also been accused of using “human shields” during the three conflicts with Israel since December 2008. It has also been accused of committing war crimes and crimes against humanity during its confrontation with Israel. Moreover, its inability to provide able governance in the Gaza Strip and failure to pay salaries to government staff has also undermined its position on the domestic front.
At the same time, Hamas’s external policies, especially after the outbreak of Arab Spring, has caused the shrinking of its regional support base. Among the countries that extended support to Hamas in terms of financial aid and training its armed militia until 2011 were Iran and Syria. However, after the outbreak of the Syrian civil war, Hamas made a strategic miscalculation by choosing to take the side of the Islamist opposition and committed itself to opposing the Bashar al-Assad regime. This placed it at odds with Iran, which not only declared support for Assad but also intervened in Syria in support of the beleaguered regime, and led to the burning of its bridges with Tehran. Hamas made a similar mistake in the case of Egypt. After the fall of Mubarak (February 2011), Hamas forged close cooperation with the Mohammed Morsi-led Muslim Brotherhood government (June 2012). And even after the Egyptian military dismissed the Morsi government and assumed power, Hamas failed to promptly distance itself from the Brotherhood. This upset not only the Abdel Fattah El-Sisi regime in Egypt but also the regimes in Arab Gulf countries such as Saudi Arabia and UEA which preferred the pre-Arab Spring status quo in Egypt. Even countries such as Turkey and Qatar, which have continued support for Hamas, have become circumspect due to mounting pressure from regional heavyweights including Saudi Arabia, Egypt and UAE to scale down such support.
Secondly, the fast changing geopolitical situation in the Middle East has put countries such as Israel, Egypt and Saudi Arabia under pressure due to growing Iranian influence. Since 2011, Iran has considerably enhanced its military and strategic presence in Iraq, Syria and Yemen. Further, it has increased its influence in Lebanon and has emerged as a leader in the fight against the Islamic State in Iraq and Syria (ISIS). In contrast, Saudi Arabia, which sees a resurgent Iran as a major threat, has been facing domestic and external challenges. Internally, Saudi Arabia has struggled with the economic slowdown due to the crash in international oil prices, the unrest in its Shia-dominated Eastern Province, growing threat from radicalism and continued popular demand for socio-political reforms. At the same time, it has also faced reverses externally due to ill-advised policy choices in Iraq, Syria and Yemen. Even its decision (together with UAE, Egypt and Bahrain) to boycott Qatar has only worked to strengthen the latter’s resolve to pursue an independent foreign policy and pushed it to the verge of joining hands with Iran on regional issues. Egypt too faces serious internal problems due to continued political instability, growing threat from radicalism and ISIS, unending economic woes and a restive population. And its regional influence has diminished because of inability to maintain primary position in Arab affairs.
Both Egypt and Saudi Arabia understand the significance of the Palestinian issue in these circumstances. A renewed Israeli-Palestinian peace process will divert attention, even if temporarily, from internal problems confronting them. Any breakthrough, howsoever unlikely, will enhance their regional status. Hence, Egypt and Saudi Arabia, along with the UAE, find strategic benefit in putting pressure on the Palestinian factions to end infighting, put their house in order and negotiate with Israel. There is also a convergence of interests between Israel and Arab Gulf countries due to their common threat perceptions vis-à-vis Iran and radical Islamism. In this situation, a positive development relating to the Palestinian issue could divert attention from other issues and provide them a strategic advantage. Moreover, Hamas’s relations with Iran has come under strain because of its anti-Assad position in Syria and it is hard-pressed for international support, which may compel it to change its hard-line attitude on some issues including allowing the Palestinian Authority to take control of the Gaza Strip.
Thirdly, President Donald Trump has shown significant interest in reviving the Middle East peace process. He has individually met the leaders of major stakeholder countries including Israel, Palestine, Jordan, Egypt and Saudi Arabia. In addition, he has appointed his son-in-law Jared Kushner as special envoy for the Middle East and chose to visit Saudi Arabia and Israel during his first international trip. Even though the chances of a revival of the peace process remains grim, there are indications that Trump’s faith that Saudi Arabia and Egypt would be able to exert pressure on the Palestinian factions has borne fruit in terms of bringing them to the negotiating table. While the Egyptian role in mediating between Hamas and Fatah has been evident, Saudi Arabia and UAE have extended support to this effort and appear inclined to establish contacts with Israel. Riyadh has also been instrumental in the re-adoption of the 2002 Arab Peace Initiative by the Arab Summit at its meeting in Amman in March 2017. Though not significant if seen individually, all these dots viewed together signal a possible revival of the peace process.
Given the step-by-step approach adopted in the latest attempt at Fatah-Hamas reconciliation and the interplay among these three factors, the chances of success of the latest reconciliation attempt might be higher. The measured international reaction, notwithstanding the American and Israeli rejection on account of Hamas’s refusal to disarm, bodes well for the reconciliation deal. A reconciliation between the Palestinian factions is not only important for Israel and Palestine but also for regional players including Saudi Arabia and Egypt. Trump too has shown enthusiasm for bringing the peace process back on track. The stakes are even higher for the Palestinian national movement because each time the peace process fails, it enhances the security risk not only for the Palestinian people but also of Arab regimes. Nevertheless, given the intractable nature of the conflict, and the domestic political dynamics in Israel and Palestine, it is too early to vest great hope on the latest reconciliation bid.
Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.
Trump’s new policy statement on Iran has enveloped the UNSC-approved Joint Comprehensive Plan of Action in a shroud of uncertainty that could lead to further instability in conflict-ridden West Asia.
US President Donald Trump announced a new Iran strategy on October 13, 2017. An essential element of the new strategy was the decision not to re-certify Iranian compliance with the provisions of the Joint Comprehensive Plan of Action (JCPOA) — negotiated by the Barack Obama administration along with the other permanent members of the United Nations Security Council (UNSC) and Germany in July 2015. The US President was required to certify every 90 days that continued sanctions relief pursuant to the JCPOA was in the national security interests of the United States, that Iran was implementing the JCPOA and not in material breach of it or pursuing covert nuclear activities. This was in tune with the provisions of the Iran Nuclear Agreement Review Act (INARA) of May 2015. Trump had previously given the certification twice after taking over as president – in April and July 2017.
Divide within the Trump Administration
Even prior to becoming president, Trump labelled the JCPOA as the ‘worst deal ever’ and vowed to dismantle it if he got elected. At an American Israel Public Affairs Committee (AIPAC) event in March 2016, for instance, Trump had insisted that his ‘number one priority is to dismantle the disastrous deal with Iran’. In contrast, General James Mattis, Trump’s Defense Secretary, had noted in an April 2016 speech that while the JCPOA was an ‘imperfect arms control agreement’, it was ‘not completely without some merit’. Mattis, along with some other senior cabinet members of the Trump administration, continued to hold such favourable views of the Iran nuclear deal even January 2017. Secretary of State Rex Tillerson, for instance, agreed during a press briefing on September 20, 2017 — in the aftermath of a ministerial-level meeting of the P5+1 countries in New York – that Iran was in ‘technical compliance’ with the JCPOA. Earlier, on August 1, 2017, he had admitted to ‘differences of views’ on the JCPOA with President Trump. And after Trump’s October 13 statement, Tillerson noted in an interview to CNN that although Iran had committed a ‘number of technical violations’, it subsequently ‘remedied’ those violations, thus bringing it back into ‘technical compliance’.
The Charges against Iran
Trump’s October 13 statement followed a National Security Council led inter-agency review of the JCPOA launched by the administration in mid-April to evaluate whether continued sanctions relief pursuant to the JCPOA was ‘vital to the national security interests of the United States’, given that Iran was a ‘leading state sponsor of terror’. Administration officials (like US Ambassador to the UN, Nikki Haley) as well as analysts critical of the deal highlight Iran’s ‘violations’ – the possession of quantities of heavy water in excess of those prescribed by the JCPOA, the maintenance of more numbers of advanced IR-6 centrifuges than allowed, concerns that Iran might not provide access to military sites where nuclear-related activities could have taken place, among others.
Other analysts however note that such criticisms ‘omit context and perspective’, pointing out that Iran briefly exceeded the limits on heavy water production twice in 2016 (February and November) and, on both occasions, the issue was amicably resolved fairly quickly. In his policy statement, Trump charged that Iran was not complying with all the provisions of the deal and highlighted the above two occasions when Iran produced more heavy water than permitted under the JCPOA. Those two violations, which happened in 2016, did not prevent Trump from certifying that Iran was in compliance twice in 2017.
Trump also alleged that Iran was placing restrictions on the work of the inspectors of the International Atomic Energy Agency (IAEA), the sole agency involved in ensuring that Iran complies with the terms of the JCPOA. Reports however note that Iran has allowed over 400 IAEA inspections, and over 80 short-notice inspections, to various parts of its nuclear programme. The IAEA moreover has daily access to Natanz, the only location where Iran is permitted to enrich uranium, for nearly 15 years, apart from many other significant transparency measures.
Trump however insists that Iran was reluctant to give IAEA inspectors access to military installations which were part of Iran’s ‘clandestine nuclear weapons programme’. While Iran has said it will not permit IAEA access to ‘sensitive’ military sites, the JCPOA has provisions to seek such access from Iran, and the P5+1 will have to provide the reasons for seeking such access. The JCPOA also contains provisions to resolve any contentions relating to such access issues, via the mechanism of the Joint Commission. Without invoking these provisions (and information if any regarding such access requests being not in the public domain), Trump in his October 13 statement has charged Iran with ‘multiple violations of the agreement’.
The most significant charge that Trump lays at Iran’s doorstep is that it ‘is not living up to the spirit of the deal’. Tillerson argues that Iran is not fulfilling the ‘expectations of the agreement’ that it will play a positive regional role as a result of the JCPOA, while admitting at the same time that the agreement ‘set aside, obviously, a serious threat to the region …’ Trump flags Iran’s activities from Syria to Yemen as destabilising the region and in direct opposition to the terms of the Iran deal, which, in his view, was supposed to contribute to ‘regional and international peace and security’.
In the first paragraph of its Preface, the JCPOA notes that the P5+1 ‘anticipate that full implementation (emphasis added) of this JCPOA will contribute to regional and international peace and security’. Trump and his officials therefore surely cannot justifiably lay the blame for lack of progress towards regional and international peace and security at the doors of the 10-year JCPOA which is only in its second year of implementation. More importantly, the JCPOA was only designed to contain the threat posed to regional and international peace and security arising out of Iran’s nuclear concerns.
Going Forward
Trump announced a tightening of sanctions on the Islamic Revolutionary Guard Corps (IRGC) and vowed to take measures in consort with the US Congress and America’s allies to prevent Iran from developing an inter-continental ballistic missile, and address concerns emanating from the ‘sunset’ clauses of the deal which gradually remove restrictions on Iran’s nuclear programme. Earlier, in February 2017, the administration had imposed sanctions on 25 individuals and companies connected to the IRGC-Qods Force (QF) and the missile programme in the immediate aftermath of Iran’s test of a 1000 kilometre range ballistic missile on 29 January—its first missile test after Trump took over.
Tillerson argues for the imperative need to negotiate a ‘secondary’ agreement that would seek to address concerns emanating from such Iranian activities relating to its missile programme and its regional role, issues which are not dealt with by the nuclear-specific JCPOA. It is not certain how such a process would begin or shape up, with the other members of the P5+1 expressing concern at Trump’s October 13 policy statement.
Further, Iran was under UNSC sanctions between December 2006 and July 2015, and concerns regarding Iran’s nuclear programme were shared by all of Iran’s negotiating partners. But the same does not hold true, for instance, on issues pertaining to Iran’s regional role. Iran meanwhile has been careful in fulfilling its end of the bargain until now, knowing fully well that a violation of the JCPOA provisions would lead to a re-imposition of the punitive sanctions measures which affected its economy quite adversely.
Now the focus has shifted to the US Congress and the possible contours of the legislative steps it could take in tune with the INARA provisions. Trump’s decision not to certify Iranian compliance could meanwhile lead to the increased politicisation of IAEA’s safeguards implementation activities in Iran, with negative consequences for the health of the JCPOA mechanisms designed to deal with such issues. The IAEA’s ability to provide a ‘broader conclusion’ that all nuclear activities in Iran are for peaceful purposes — a possibility the JCPOA alludes could occur in eight years from Implementation Day or even earlier — could subsequently be severely impacted. Trump’s policy statement has enveloped the UNSC-approved JCPOA in a shroud of uncertainty that could lead to further instability in conflict-ridden West Asia.
Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.
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