China, COVID-19, Research, security, Writing

India’s security choices during the COVID-19 pandemic

At the start of the 2020s, India has been confronted with a massive viral spread and a relentless People’s Liberation Army (PLA) on its borders. Last year, even as India was responding to the pandemic that originated in Wuhan, it had to mobilise its forces to counter Beijing’s invasion on the Himalayan heights. Both resulted in loss of lives and both show no signs of going away. While the virus is threatening to rise again in a ‘third wave,’ China has literally dug in at high altitudes in its quest to secure real estate and territory that it believes is crucial for its Belt and Road Initiative (BRI), that provides access to a warm water port in the Arabian Sea, and that is critical to a larger project that seeks to reshape the geopolitical map of Asia. While the two nations have taken modest steps to disengage, military and diplomatic negotiations have not yielded substantive results.

In June 2021, reports emerged that China had been ramping up infrastructure along the Tibetan border. Following this, around 200,000 Indian soldiers have been deployed on the frontier, an increase of over 40 percent from 2020. For India, China poses a clear and present danger. To respond to an expansive and belligerent northern neighbour, it has to reorient its conception of its security as well as deployment of its political and diplomatic resources. This was not the case until very recently.

For India, China poses a clear and present danger. To respond to an expansive and belligerent northern neighbour, it has to reorient its conception of its security as well as deployment of its political and diplomatic resources.

Pakistan had been the major preoccupation since Independence in 1947. Its occupation of parts of the Indian state of Jammu and Kashmir, its export of terror to India as a means of waging an asymmetric war, and its nuclear proliferation had positioned it as the main threat to India’s national security. For long, China had escaped critical scrutiny despite provocative actions. The Indian security establishment was not very vocal when China tested an atomic device during President R. Venkataraman’s state visit in May 1992 — clearly intended to send a message to India. Indian Defence Minister George Fernandes’ prophetic assertion at the turn of the century that China, not Pakistan, was India’s “potential threat No. 1” was not universally shared in the strategic community in New Delhi.

In their public speeches, Chinese leaders declared their preoccupation with the welfare of their people. They took great pains to position China as a responsible power that avoided international confrontation. In hindsight, they clearly succeeded. From the ‘returns seeking’ investors in the United States to the political leaders in Europe and Asia who wanted a piece of the Chinese economic pie, all bought into this masterly conduct of statecraft. For India, the urge to keep China in good humour was also implicated by the border conflict of 1962. Relations had thawed only a quarter-century later. Prime Minister Rajiv Gandhi’s visit to Beijing in 1988 paved the way for the Sino-Indian Bilateral Peace and Tranquility Accords inked in 1993 and 1996 to stabilise the Line of Actual Control (LAC).

From the ‘returns seeking’ investors in the United States to the political leaders in Europe and Asia who wanted a piece of the Chinese economic pie, all bought into this masterly conduct of statecraft.

With stability along the boundary, trade and cultural ties between the two nations began to flourish. The boundary pacts mandated that large numbers of troops would not be amassed along the border, and that there would be no attempts to alter the status quo unilaterally. The Indian establishment believed that the border accords would be “peace for our time.” This search for fool’s gold would lead to India curtailing its multilateral naval exercises and slowing down infrastructure development in critical sectors of the India-China border. Influential voices in the Manmohan Singh government (2004-2014) believed India’s security interests would be served if it did not upset China.

Pushback came only in 2013, when transgressions by Chinese forces in Depsang were diplomatically and militarily countered. Yet, here too there was much discussion and debate in the upper echelons of government. Greater clarity was to emerge in 2014 when India, under the newly elected Prime Minister Narendra Modi, was at the receiving end of Chinese incursions in Ladakh even as a summit was under way with the visiting Xi Jinping. With two episodes in close succession, it would be fair to say that a change in India’s approach to its northern neighbour was thrust upon it.

The Indian establishment believed that the border accords would be “peace for our time.” This search for fool’s gold would lead to India curtailing its multilateral naval exercises and slowing down infrastructure development in critical sectors of the India-China border.

In recent years, India has been able to recalibrate its approach towards the Middle Kingdom even as the world order is changing. The US-India partnership has evolved rapidly. Washington has helped thwart moves by China to internationalise the issue of Jammu and Kashmir, enabled India’s entry into the international nuclear order and brought pressure on Pakistan to crack down on terrorism. The Quad grouping, where Japan and Australia join the duo to keep the Indo-Pacific region inclusive and open to all, is working on providing alternatives to the BRI and is seeking a number of resilient arrangements, including on technology supply chains. A Quad vaccine for all is on the anvil and other countries are looking to partner with the Quad on important global issues.

The ‘La Pérouse’ maritime exercises in the Bay of Bengal, with France joining the Quad members, and the Australia-France-India ministerial dialogue demonstrate that the idea and the ideals of ‘Quad Plus’ are gathering steam. The UK has floated the ‘Democracy 10,’ which includes the Quad countries, to tackle issues related to 5G and emerging technologies that may have a bearing on collective security. Whitehall’s recent assessment of its economic, security and diplomatic interests may see it engage more deeply with India in the Indo-Pacific. Old Europe is certainly finding a place at the core of India’s security calculations.

A testament to India’s recalibration is NATO Secretary General Jens Stoltenberg’s pitch, at the Raisina Dialogue 2021, to broaden cooperation. NATO views the rise of China as having huge security implications and assesses India as its partner. PM Modi’s historic Porto Summit with leaders of the EU and 27 EU member-states helped boost cooperation on terrorism and maritime security. The ‘connectivity partnership’ between the EU and India seeks to finance projects in other nations, offering an alternative to China’s BRI.

NATO views the rise of China as having huge security implications and assesses India as its partner.

Even as India strengthens and redirects its relationship with the old world, Russia remains the X factor. New Delhi’s strategic ties with Washington have become a sore point for the Kremlin. If two new poles emerge — the US and its partners and allies, and the Beijing-Moscow ‘axis ’ — India’s room for manoeuvre may be affected. India is alive to this possibility and is redoubling its efforts to work with Russia, its largest weapons supplier over the past decades. India has to convince President Putin that the bilateral relationship allows him greater latitude while dealing with his southern neighbour. Through back channels, India also has to work towards a reset between the US and Russia and to convince the EU that pushing Putin into Xi’s corner is dangerous and counterproductive. The recent Biden-Putin summit may have gone some way in making this a possibility.

A resurgent China, with its plan to establish regional hegemony in Asia even as it tries to split and dominate Europe, is Delhi’s biggest security challenge. The Indo-Pacific will define the future of the Asian Century. India has been astute in ensuring that its partners and fellow stakeholders from the Atlantic order work closely with it to navigate the choppy waters of the Indo-Pacific.

An abridged version of the above was published for the Lennart Meri Conference.

Research, Writing

Big Tech and the State: The necessity of regulating tech giants

The scramble for gold on the Internet has transferred control of vast swathes of cyberspace to a very small and select group: Big Tech. This has made ‘significant social media intermediaries’ highly profitable ad businesses that have grown amid non-existent privacy and weak intermediary liability laws. They make the market, grow the market, and shape market rules. No ad business, or any business in history—not even Big Oil or Big Tobacco—has held so much power over consumers and the economy. This perverse power is, perhaps, the single biggest challenge that nations and peoples will have to grapple with. Accountable Tech must be India’s leitmotif in 2023 as it presides over the G-20, and a robust digital republic its sovereign mission as its turns 75 next year. This will need sensible politics, sophisticated policies, and a return to first principles.

Concentration of wealth is a competition issue and an economic policy question. Left unregulated, it brings about inequality in income and opportunity. But concentration of power when it comes to discourse—what is promoted, shared or suppressed—should be more worrying. Safe-harbour provisions in the United States along with self-regulation principles have allowed Big Tech to cherry pick what is to be acted on and what is to be ignored, effectively making it the arbiter of permissible speech. For example, anti-vaccine Twitter users have thrived during the pandemic, while, sometimes, less dangerous actors have had their posts labelled. In January, Angela Merkel, Chancellor of Germany, denounced the de-platforming of then US President Donald Trump by Twitter. “The right to freedom of opinion is of fundamental importance,” Merkel’s Chief Spokesperson, Steffen Seibert said, “Given that, the Chancellor considers it problematic that the President’s accounts have been permanently suspended.”

The issue here is not whether Merkel agreed or disagreed with Trump’s tweets. The question is—who censors him, how, and with what process and level of transparency? For the Chancellor and for many, Twitter cannot choose for itself when it seeks to be a provider of public goods, and when it is a private messenger eligible for intermediary protections. When governments around the world describe digital connectivity as a ‘utility’, information lines cannot be disrupted by religious, cultural or ideological filters. Like water, electricity and roads, significant social media will have to serve all, even those its management and owners disapprove of.

[Platforms] cannot choose for [themselves] when they seek to be a provider of public goods, and when they are a private messenger eligible for intermediary protections.

The instances when utilities (say electricity and water) are denied or disconnected are specific, rare and regulated. Even in the information age, only the state and its three pillars have this right. Global Big Tech is not part of this constitutional arrangement. There are checks and balances in place, with legal recourse available for all within the state and for external actors as well. Any alternative to this constitutional setup would be akin to legitimising foreign influence operations in domestic affairs. In an extreme, for a country that is almost perpetually in election mode, it would be tantamount to election interference. This may seem like hyperbole, but it is closer to the truth than we suspect. For instance, if an electoral candidate makes an incendiary speech on a physical stage, the Election Commission, law enforcement agencies and the judiciary act against him—not the private company that has set up the stage or the power utility that has provided an electricity connection to the mike. Is the online equivalent being honoured by Big Tech?

Regulation of Big Tech across democratic setups

Australia gets this. In February, it passed the News Media Bargaining Code. The code encourages intermediary tech firms to negotiate deals with media outlets, effectively mandating that Facebook and Google pay news firms for content. The law was passed after a protracted battle between the Australian government and social media firms. It escalated when Facebook removed content of certain Australian news agencies, several official government handles, emergency services, and civil society organisations from its platform. Prime Minister Scott Morrison held firm: “These actions will only confirm the concerns … about the behaviour of Big Tech companies who think they are bigger than governments and that the rules should not apply to them.”

Canada, too, is making moves to curtail the wealth and discourse monopoly currently enjoyed by Big Tech. Just this week, Canadian lawmakers passed Bill C-10, which seeks to regulate the kind of content media streaming services prioritise on their platforms. The Bill, which is yet to be passed by the Senate, aims to make digital streaming platforms at par with traditional broadcasting services; the latter are obligated to increase the visibility and “discoverability” of Canadian content, and to set aside part of their profits to support a fund that promotes original Canadian productions.

Across the pond from the Americas, the European Union is also actively working towards mitigating the risks posed by the monopoly of Big Tech. Margrethe Vestager, Vice President of the European Commission for A Europe Fit for the Digital Age, has stated that tech giants, “have the power to guide our political debates, and to protect—or undermine—our democracy.” In December 2020, Vestager and her office tabled the Digital Services Act (DSA), which seeks a systemic assessment of the varied social, economic and constitutional risks posed by the services provided by Big Tech.

The most decisive move yet has come from Poland, which has proposed a law to ‘limit’ the censorship tendencies of the tech giants. Soon after the deplatforming of Donald Trump by Twitter, Prime Minister Mateusz Morawiecki wrote on Facebook: “Algorithms or the owners of corporate giants should not decide which views are right and which are not. There can be no consent to censorship.” The new proposed law provides for a special mechanism for those whose content or profiles have been blocked/deleted by social media platforms, where they can complain directly to the platform, which is obligated to respond within 24 hours. After a review by a specially constituted “Freedom of Speech Council”, deleted content can be restored by order. If platforms do not comply, they can face a heavy fine of up to 50 million zloty (US $ 13.4 million).

Regulatory Frameworks in India

India, too, must take some tough calls. The vision of Digital India has advanced—from only four unicorn companies in 2014, India had 12 in just 2020 alone. Regulation must keep pace with this economic and social reality. It is absolutely critical that the Privacy and Data Protection (PDP) Bill, currently being examined by a Parliamentary Joint Committee be brought forth and enacted as law. Without the umbrella framework of the PDP bill, India’s regulation of Big Tech will be ad hoc, and may be misconstrued as a political instrument.

The vision of Digital India has advanced—from only four unicorn companies in 2014, India had 12 in just 2020 alone. Regulation must keep pace with this economic and social reality.

With respect to regulating intermediaries, the Indian government initiated a public consultation process in December 2018 and invited submissions from the public to the Ministry of Electronics and Information Technology. A spectrum of civic, industry and academic actors participated. The rules were notified in February 2021, specifying clear compliance requirements within three months. Yet, the reaction of Big Tech platforms has been to delay, stall and obfuscate compliance.

It is high time that the actions of these companies were subject to systematic and rigorous Parliamentary oversight; but for that to happen, legislation is needed. Indian law and policy are rooted in our Constitutional principles. Indian policies on digital governance are no different, but they now need the imprimatur of Parliament to truly be effective. And should there be questions and grievances regarding the scope and constitutionality of the law, the courts of India will be the ultimate judge.

The objective of regulatory frameworks is to safeguard public interest, even (or perhaps especially) if it involves eroding the bottomlines of powerful vested interests. To once again quote the EU Commission’s Magrethe Vestager (in an intervention at a technology policy panel at the Raisina Dialogue earlier this year), regulating Big Tech, “Is a job, not a popularity contest”.

Perhaps, the real limitation is one of our imagination. In our minds, Silicon Valley is forever a happy, sunshine place, led by geeky, long-haired wunderkinds in t-shirts and flip-flops. The reality is Big Tech’s instincts today are driven by a single-minded sense of territoriality and collective impatience for different governance systems. For them, their ‘code is law’ and it is universal. That is at the crux of it.

China, foreign policy, Great Power Dynamics, India, international affairs, Research, Strategic Studies

Communist Inc: The Pandemic and China’s World

Co-authored with Akhil Deo

The Communist Party of China will celebrate the 100^th anniversary of its founding this July. This marks the first significant milestone in Chairman Xi’s “China Dream”, a project that will ostensibly culminate in 2049, the 100^th anniversary of the founding of the People’s Republic, with associated aspirations of China cementing its position as a global power. In our book, Pax Sinica, we had detailed three instruments that are crucial to these ambitions: Leadership over global institutions and processes, a conducive environment for achieving “discourse power”, and the construction of new international coalitions. China seeks to control global institutions and rule-making processes, grease and dominate the media and public sphere into a favourable disposition, and enter into perverse partnerships with other nations, described as a “loan for sovereignty” arrangement in one of its avatars.

The onset of the pandemic has made many of these strategies more visible, even as it highlighted the opportunities and challenges that lie ahead for China.

China’s global dominance strategies

For the past decade or more, China has pursued a dual strategy of co-opting post-war institutions while simultaneously pursuing its own brand of multilateralism through the Belt and Road Initiative (BRI) and an assortment of formal and informal fora, such as the Shanghai Cooperation Organisation. Three approaches guide China’s strategy: Building global influence and prestige; shaping and/or altering key norms, standards, and processes; and creating the capacity to withstand pressure for selectively disregarding international rules.

The fruits of these efforts were visible amid the pandemic, most controversially at the WHO, which struggled to balance its commitment towards transparency and accountability, and its operational reliance on and systematic infiltration by China. Under cover of the pandemic, China has made more significant inroads as well. In April 2020, China was appointed to the influential United Nations Human Rights Council (HNRC) consultative group, which plays a crucial role in selecting global monitors for free speech, arbitrary detention and forced disappearances—the very rights that Beijing crushed in Hong Kong and Xinjiang.

One aspect of this ploy of the Communist Party of China (that effectively and absolutely owns the country) that often goes unnoticed in India is China’s leadership in technology standard-setting organisations. Over the past decade, Beijing has improved its representation in, and submissions to, the technical committees and sub-committees of organisations like the International Organisation for Standardisation and the International Electrotechnical Commission. In March 2020, China’s Standardisation Administration published an innocuous document outlining the elements of a more ambitious strategy known as China Standards 2035. The 15-year blueprint will chart a pathway for China to dominate standards in emerging industries, giving it the ability to set the terms of international trade and even define the relationship between technology and society globally.

Augmenting China’s influence in international organisations and standard-setting bodies is its global media and narrative management strategy—an essential facet of “discourse power”

Augmenting China’s influence in international organisations and standard-setting bodies is its global media and narrative management strategy—an essential facet of “discourse power”. Chairman Xi alluded to this in a recent speech, calling for China’s media to develop an “international voice”. The research in our book highlighted what scholars called China’s policy of “borrowing a boat to go out into the ocean”. In other words, China’s use of paid inserts and large advertisements in newspapers allows it to propagate its narratives. Two recent reports provide insight into how significantly these efforts have evolved and intensified.

The first, by the Associated Press and the Oxford Internet Institute, describes China’s use of bots and fake social media accounts to amplify its “wolf warrior” diplomats and their proxies online. While China has previously used these tactics in Taiwan and Hong Kong, such operations have taken on a global scope amid the pandemic. Beijing’s appetite for misinformation, exemplified famously by Zhao Lijian’s claim that the coronavirus originated outside China, only exacerbated the challenge. The second, from the International Federation of Journalists, posits that Beijing’s strategy of syndication appears to be paying off. Over the year, its inserts into local media, increasingly in vernacular, along with a more engaged diplomatic community, have bolstered its visibility in the developing world.

Beyond its media strategy, China continues to fund educational institutions through opaque means, sometimes with attached costs to academic freedom. The Communist Party also increasingly hosts foreign diplomats and security officials for training programmes on “information management” and sponsors ruling party politicians around the world to attend training sessions on party building and governance. In 2020, under pressure from Western scrutiny, Beijing rebranded its infamous Confucius Institutes and handed over operations to a ‘non government organisation’ defined by the party. However, the US and Europe aren’t necessarily the targets of its educational and cultural investments. A report from Aid Data in 2018 revealed that countries that are more aligned with China’s foreign policy receive the bulk of its largesse. While it is unclear yet what gains have accrued to Beijing from such initiatives, they represent a formidable institutionalised apparatus to export its ideology and political practices.

The Communist Party also increasingly hosts foreign diplomats and security officials for training programmes on “information management” and sponsors ruling party politicians around the world to attend training sessions on party building and governance

Backdoor entry into the EU

Finally, we had highlighted China’s strategy of building new coalitions and undermining existing ones. Nowhere was this more apparent than Europe, where Beijing’s 17 + 1 platform for engaging with Central and East European (CEE) nations had triggered concern about its “divide and rule” tactics. To some extent, China’s investments in the region have paid off— with countries like Greece and Hungary scuttling the EU’s efforts to criticise China’s violations of international law in the South China Sea and the passing of the national security law abuses in Hong Kong.

2020 dampened this momentum for China—and demonstrated that large powers can still secure their peripheries. Several East and Central European leaders expressed dissatisfaction with the pace of investments and many were no-shows at the China-led forum. Many have also signed onto the US’s Clean Network Initiative, intended to prevent the entry of China’s 5G companies into key markets. The Baltic states, meanwhile, were more apprehensive about Russia than they were keen on Chinese investments.

Nevertheless, the 17 + 1 platform is but one instrument in China’s more global “perverse diplomacy” toolkit, and writing it off is premature. It marks a permanent presence that China now enjoys at the EU’s doorstep, one that the CEE can always leverage for better terms from Brussels. At the very least, China is now a voice in domestic EU debates.

China also hosts a web of high-level forums and summits in nearly every part of the world, including the Arab states, Africa, Latin America, and the ASEAN. Beijing’s vaccine diplomacy has won it praise in most of these geographies—especially in the face of Western absence and selfish acts of the past year. These forums augment and bolster various initiatives, ranging from China’s infrastructure investments to promoting its technology propositions. And its economic presence and investments are buying it diplomatic support as well. For instance, the support of African states has been crucial for China when its record in Xinjiang and Hong Kong was questioned in the UN in 2020 and 2019.

When looking at the pandemic in retrospect, Chinese leaders will likely see parallels to the 2008 financial crisis—one more milestone in the long decline of the West, and China’s rise. Beijing robustly managed the pandemic at home and stepped up to provide global public goods. To be sure, it faces new headwinds: Public opinion of China has plummeted in the West, the Biden administration is gearing up for great power competition, the EU has ‘frozen’ its latest investment deal with China, and institutions like the G7 are stepping up to offer alternatives to the BRI.

Public opinion of China has plummeted in the West, the Biden administration is gearing up for great power competition, the EU has ‘frozen’ its latest investment deal with China, and institutions like the G7 are stepping up to offer alternatives to the BRI

Elsewhere, the message from China over the past year is resilience and continuity. It remains committed to an alternative form of globalisation via the BRI. Its influence over international institutions will only grow, proportional to its wealth and power. Beijing’s media is increasingly savvy in projecting and protecting its core interests. Further, contrary to the perception that China is “friendless”, it can call upon nations to support it when it matters. And even when there is pushback, it is often haphazard. The recently announced “Build Back Better World”, while grand in intent, struggles with the contradictions within the group on their assessment of the Middle Kingdom. Key countries have chosen trade over security and valuations over values in their engagement with China.

The future of the Indo-China relationship

Where does this leave India? Our book warned that Doklam was unlikely to be the last border confrontation between the two Asian powers. We argued that it opened a new tense period between India and China—an Asian Cold War. The Galwan Valley Clash confirmed the advent of a new era of high altitude faceoffs with possible ramifications in the oceans as well. This rift has only grown wider amid the pandemic. China’s belligerence in the Himalayas, and India’s restriction on Chinese technology platforms as well as its alignment with coalitions competing with China have all but cemented contestation. This will drive engagement in the years ahead.

New Delhi will confront a more fundamental dilemma: On the one hand, political tensions with China will remain high. But on the other, it is dependent on trade with China for its economic objectives—a dependence that will likely remain given the adverse economic consequences of the pandemic. Indeed, data published by Chinese customs officials revealed that trade with India boomed in 2021, even as Beijing appears to be consolidating its position in the Himalayas. How India resolves this contradiction and builds a security posture that accounts for this will indeed define the relationship.

New Delhi needs clarity of thought and a national consensus on China. In the coming days, it will have to take a leaf out of the Chinese playbook and engage in trade with the one that seeks to do it harm. Its economic engagement must be alive to this and its security considerations immune from these entanglements. It must realise that it cannot trade or talk its way into a better relationship with Beijing. These are important but essentially sideshows to the principal theatre of engagement. Deceit and political muscularity is the new grammar of the bilateral that China has proffered. With limited recourse available, the time for India’s legendary ambiguity is long past.

PAX SINICA: Implications for the Indian Dawn, by Samir Saran and Akhil Deo, is available here.

Research, Writing

The Global Trade Map After COVID-19: Where to for Global Companies and Investors, and Policymakers?

Co-authored with Dr. Alexis Crow

In the wake of rising protectionism over the last half decade, the sudden economic stops wrought by COVID-19, the corollary disruptions of supply chain activity, and shocks to supply and demand, commentators from across the globe have trumpeted the ‘end’ of globalisation. Indeed, even predating the populist movements in the UK—culminating in the Brexit referendum—and in the US, resulting in the Trump era of tariffs and US withdrawal from trade agreements—some economists had forecasted a plateauing and eventual tapering of globalisation. With the shift from the old to the new economy—that is, growth in services activity and employment—experienced by many advanced economies (including the US, the UK, and the Netherlands), less goods—or volume of merchandise—are being moved around the world.

This carries with it certain implications, as the manufacturing and industrial eras associated with the production of goods have significantly boosted national incomes within domestic borders. Additionally, competitive export of these goods to foreign markets has further contributed to both domestic as well as global economic growth. Looking beyond goods, cross-border exchanges of services (such as travel, IT, and legal and professional services), as well as flows of finance, and exchanges of human capital have been integral components of the globalised business landscape, critical for building business, profit, and generating returns.

With the future of trade hanging in the balance, what’s in store for corporate executives and investors? For many businesses—even those with a predominantly domestic sales base—have often relied upon the process of globalisation in order to create wealth, ultimately translating into boosting economic growth and employment. Will ongoing trade tensions—as well as reactions by governments to onshore production in the wake of the COVID-19 pandemic—actually prove to be the end of the multi-decade process of globalisation as we know it?

China, Research, security, Speaking

Room for two? India, China and the world order

The simultaneous rise of India and China will define the 21st century.

At a book launch event in Delhi, Samir Saran and EAM Subrahmanyam Jaishankar discuss this new moment that will undoubtedly redefine the tenants and principles of the international order.

In their book, Pax Sinica: Implications for the Indian Dawn, Samir Saran and Akhil Deo analyse the key events and policies that have shaped the Asian Century since the elevation of General Secretary Xi Jinping. From the launch of the Asian Infrastructure and Investment Bank to the unveiling of the Belt and Road Initiative, China’s proposition presents a contested model of cooperation that is rearranging regional and sub-regional political alignments. India, amongst others, is responding to these developments to safeguard its own room to maneuver.

Soon after his elevation to the post of General Secretary of the Communist Party of China, Xi Jinping rapidly consolidated power at home and expanded China’s influence in the international system. His desire to achieve the ‘China Dream’ by the middle of the century has seen him steadily erode the norm of ‘collective leadership’ at home and has made China’s presence across Eurasia and the Indo-Pacific more expansive. He has determinedly set about reshaping the world order for the benefit of his Communist Party.

Samir Saran and Akhil Deo offer a retrospective reading of how this came to be—tracing the key policy shifts that have come to define China in the Xi Jinping Era. From the creation of the Asian Infrastructure Investment Bank to the Doklam standoff, they identify pivotal decisions and events that have shaped China’s engagement with the world—and how global powers, especially India, have responded to the Middle Kingdom’s rise.

Read here – https://rupapublications.co.in/books/pax-sinica-implications-for-the-indian-dawn/

Books, China, Research, Writing

PAX SINICA: Implications for the Indian Dawn

More than three years after the Paris Agreement was finalised at COP21, it is evident that the developing world is unlikely to receive even the modest amount of US$100 billion annually in climate finance by 2020. This is primarily a result of the collective failure of the developed world to meet their moral and real climate obligations that pre-date the Paris Agreement. This lack of finance for climate action is exacerbated by the fact that the international financial community—banks, asset managers, investors and capital markets—have failed to align their operations with the goals of the Paris Agreement. The involvement of international financial investors, both private and multilateral, in financing green transitions in developing countries has so far been feeble, sporadic and arbitrary. Unless these resources can be leveraged to cater to the development needs of emerging economies, there is a real possibility that the green transitions that we all seek will be incomplete and mostly underwritten by the world’s poorest citizens.

For the past two years, ORF and the MacArthur Foundation have attempted to create a new framework to ensure that the global financial community better responds to the imperatives of the Paris Agreement. Our research acknowledges that official aid and grants are insufficient to meet the burgeoning energy and infrastructure needs of emerging economies. There is no doubt that we require new financial instruments and pipelines to support sustainable development in much of the world. This publication, comprising of 11 policy essays on the subject of climate finance, discusses this objective through multiple lenses. It is a culmination of our efforts to work with a global network of experts and stakeholders to identify bottlenecks and provide new solutions to ensure that emerging economies can access finance to meet their green development goals.

Our series on financing green transitions has largely focused on India, and for good reason: It will be the first large country that must transition to a middle-income economy in a fossil fuel-constrained world. India is also constricted by the same political, regulatory and financial challenges that confront much of the developing world. Given the weak efforts of the developed world to assist the developing countries so far, India has had to chart a path largely through its own economic and financial arrangements. Therefore, an assessment of India’s capacity to now leverage international financial flows and its ability to undertake a low-carbon transition may well provide a reliable template for developing countries to emulate.

Through 11 essays, we explore three broad themes: the role of international investors and institutions; India’s own development policy choices and lessons therein for other developing countries; and the role of human capital in climate-resilient investment.

Our first set of essays analyses the behaviour and financial practises of international financial institutions, investors and credit rating organisations. In “An Incomplete Transformation”, Mihir Sharma argues that Multilateral Development Banks have failed to create bridges between private capital and clean energy/climate resilient infrastructure demands in developing countries. He calls on MDBs to adapt to developing world priorities, crowd-in private capital, and streamline operational activities in emerging economies. In “Financing Climate Resilience”, Vikrom Mathur and Aparna Roy highlight the bias of international investors towards investing mostly in mitigation efforts. Conventional wisdom in the private sector holds that the costs of adaptation and resilience should be borne by governments. Taking a different approach to the problem, Mathur and Roy offer solutions focused on commercial and business opportunities. In two pieces, “Rating Resilience” and “Ratings for Renewable Energy”, Aled Jones studies the limitations of current literature and practices relating to credit rating of infrastructure projects and renewable energy projects and proposes a more holistic framework of risk metrics for both renewable energy and climate resilient infrastructure. Finally, in “The Political Economy of Basel”, Mihir Sharma outlines how the Basel norms have been designed to respond to the interests of a select group of developed nations. He argues that by prioritising macroeconomic stability and implementing new liquidity restrictions, these actors have failed to consider adverse implications on cross-border flows, especially with regards to long-term green investments.

The next set of essays focuses on India’s domestic challenges, particularly in its infrastructure and urban development policy and its efforts to transition to a low-carbon economy. In “PPP model, regulatory oversight and private financing: Evolutionary trinity of India’s infrastructure”, Gautam Chikermane offers a comprehensive historical account of the political economy of India’s infrastructure policy, documenting the many failures that have plagued it. Given that a stable infrastructure policy will have significant implications for green investment choices, Chikermane’s study of India’s policy failures provides valuable lessons. In “Financing Urban Infrastructure for an Evolving India”, Pritika Hingorani, Sharmadha Srinivasan, and Harshita Agarwal examine the reasons for the lack of private-sector involvement in India’s climate-resilient urban infrastructure. They analyse the current regulatory regime for urban infrastructure in India and provide a set of solutions, advancing both public and private sector participation in the future. In “Moving from Growth to Development: Financing Green Investment in India”, Neha Kumar, Prashant Vaze and Sean Kidney explore new financial instruments that India can employ to finance its green infrastructure needs. They outline how India can more effectively scale its green bonds market, leverage international debt capital markets, and harness blended finance to achieve this objective. Finally, in “India and the World,” Aparajit Pandey and I outline three key structural barriers that threaten to undermine India’s rapidly growing green energy sector: the state of its distribution companies, underdeveloped financial markets and inflexible international credit and risk assessment practices. Offering case studies from India’s state and municipal level policies, we argue that India’s ability to succeed in its low-carbon transition will open new pathways for emerging economies around the world.

In our final set of essays, we examine the role of human capital in enabling greater green investment, focusing on leadership and gender. In “Pay for Sustainable Growth”, Charanjit Singh, analyses the executive pay of 31 of India’s top companies showing that by linking management compensation to short-term performance objective, companies are failing to integrate sustainability objectives into their long-term vision. The chapter proposes a restructuring of the private sector’s approach to executive compensation, focused on long-term sustainable economic growth. Lastly, in “Gender and Climate Finance,” Vidisha Mishra posits that even though women and marginalised groups are likely to be more exposed to climate change related risks, they are severely underrepresented in the investment and regulatory classes. Her essay then unpacks the opportunities and benefits of meaningfully building gender concerns into climate finance mechanisms.

Our contributors have attempted to explore the reasons behind the significant shortfall in private finance in relation to low-carbon investments. They have also collectively offered solutions, both domestic and international, with regards to the flow of finance for climate projects. The success of these solutions, however, will be predicated on some boundary conditions that developing economies and the international financial community must meet.

First, developing countries must reclaim the power grid. The large-scale subsidisation of power in the developing world has created significant distortions in energy use, pricing and policy. State-level reform in India suggests that splitting the electrical grid for agricultural and non-agricultural sectors, implementing a credible metering system and providing subsidies as direct benefits can have significant positive effects on the power sector. Without a viable grid, green investments are likely to remain unviable.

The second is to build capacity amongst international investors to understand risk and opportunity in developing states. There is generally a bias stemming from lack of knowledge (information) and capacity (human resources) to assess risks in emerging economies. This ultimately translates into an inability to understand the economic landscape of recipient countries. Further, as one of our authors has highlighted, there are few institutional attempts at gendering climate investments and finance. A lack of female representation in the investor community, especially from the developing world, invariably means that the concerns and voices of the most vulnerable are ignored as financial plans are scripted.

Third, developing countries must build innovative policy tools to leverage new financial instruments and mechanisms. Currently, regulations related to debt and equity markets restrict the flow of international capital into climate action projects. Emerging economies must co-opt their financial sector in the fight against climate change. Financial markets that allow for debt financing and locally issued green bonds for example create a diverse set of instruments that different types on investors can rely on. More ambitious measures can include the creation of a “green investment bank,” which allow the crowding in of private investment in green assets.

Finally, there is a new imperative to overhaul regulatory systems around the world, both in recipient and investing states. Vast pools of money are held by multiple categories of investors, such as pension funds and insurance companies. However, existing regulations limit the ability of fund managers to invest in climate related projects. Further, international credit rating agencies reassess the methodology for assessments of green projects in developing countries. And perhaps most importantly, there is an urgent need to review the current set of Basel Accords as well as the next iteration of Basel IV accords. The macro-prudential regulations were designed to create a more risk-free international banking system but have unintentionally stymied the ability of the financial sector to contribute to climate resilience. The banking community must acknowledge that planetary risk is the largest systemic challenge to financial stability and that mitigating such risk is the most prudential practice.

While these solutions are far from comprehensive, they address some of the most persistent structural barriers to supplying and accessing climate finance. ORF and the MacAuthur Foundation will continue to explore new ways and means to ensure that developing countries can access financing to pursue their low-carbon transitions. We will also continue to study India’s own financial, technological and governance solutions in the hope that these experiences can benefit other countries and communities. We hope that the insights presented in this book will inform academics, business leaders and policymakers in their efforts to better understand the importance of the global financial community finally signing the Paris Agreement.

Read here – orfonline.org/research/financing-green-transitions-47553/

Books, Environment, Research, Writing

Financing Green Transitions

The future of work in India is uncertain, but full of opportunities. This report attempts to answer key questions around the present and future of transformative technology in India and its impact on job creation, workplaces, employment trends and relations, and the nature of work itself.

Our research reveals that companies in India are optimistic about the future and are open to the possibilities presented by new technologies and digitisation. This optimism is likely to stimulate innovation and adoption of new technology and drive transformation, growth and progress. This report sets out a roadmap for an inclusive future of work in India that capitalises on the opportunities presented by technological disruption and digitisation. By using the opportunities at hand, India can:

Generate sufficient new employment opportunities for the existing and growing labour force.
Create decent jobs with better wages, security, protections and safety, necessary for improving individual and household welfare and well-being.
Ensure equal opportunities for women, youth and other marginalised communities previously unable to participate equally in the paid economy.
Establish an ecosystem better equipped to prepare the workforce for changing skill and educational requirements.
Create of an inclusive policy environment which balances the need for job creation with the interests of workers.

This report outlines findings from the Future of Work, Education and Skills Enterprise Survey. Data was collected from 774 companies in India, from micro-sized firms to those employing more than 25,000 workers. It presents findings on the pace of technological adoption and digitisation among Indian companies, and its impact on job creation, displacement and nature of work. In addition to the effects of the changing nature of jobs on wages, contracts, protections and security. Finally, the report includes recommendations on policies, programmes and action needed for India to leverage the possibilities of technological disruption, manage the associated risks, and enhance its preparedness for the future of work in the digital age.

Read here – https://www.orfonline.org/research/future-of-work-india/

Books, Research, Writing

The Future of Work in India: Inclusion, Growth and Transformation

Raisina Files 2018 unpacks disruption and its interaction with global politics. Disruptive forces have been grouped along the lines of actors, processes, and theatres: three major nation-states whose external engagements are seeing shifts; three processes that are re-organising political, economic, and social spaces; and two old and new arenas where geopolitics are having local, regional, and global repercussions.

Raisina Files, an annual ORF publication, is a collection of essays published and disseminated at the time of the Raisina Dialogue. It strives to engage and provoke readers on key contemporary questions and situations that will implicate the world and India in the coming years. Arguments and analyses presented in this collection will be useful in taking discussions forward and enunciating policy suggestions for an evolving Asian and world order.

Debating Disruption: Change and Continuity | Ritika Passi and Harsh V. Pant, ORF

ACTORS

Is the US a disruptor of world order? | Robert J. Lieber, Georgetown University
Russia as a disruptor of the Post-Cold War order: To what effect? | Dmitri Trenin, Carnegie Moscow
China as a disruptor of the international order: A Chinese View | Yun Sun, Stimson Center

PROCESSES

Globalisation, demography, technology, and new political anxieties | Samir Saran and Akhil Deo, ORF
Minority Report, Illiberalism, intolerance, and the threat to international society | Manu Bhagavan, Hunter College
Fourth Industrial Revolution: Evolving Impact | Pranjal Sharma, author, Kranti Nation

THEATRES

Revolutionary Road: Indo-Pacific in Transition | Abhijnan Rej, ORF
Middle East: Cascading Conflict | Tally Helfont, Foreign Policy Research Institute
Climate Change, Transitions, and Geopolitics | Karina Barquet, Stockholm Environment Institute

Read here – orfonline.org/research/debating-disruption-world-order/

Books, Raisina Dialogue, Research, Writing

Debating Disruption in the World Order

Over the years, India earned the epithet of a reluctant power in Asia — exuberant in its aspirations, yet guarded in its strategy. However, as the challenges in its immediate neighbourhood and beyond continue to evolve, India is today gearing up to embrace a larger role in the far wider theatre of the Indo-Pacific.

Forming the core of the ongoing global economic and strategic transitions are a rising and assertive China, an eastward shifting economic locus, and the faltering of Western-led multilateral institutions. These converge with domestic development and national security objectives to demand that India strive to expand its presence, reach, and voice both on land and in the sea in its extended neighbourhood. Today, New Delhi is actively seeking to create opportunities for mutual development in the Indo-Pacific, in the Arabian Sea and in Africa even as it engages like-minded nations in the pursuit and preservation of a rules-based order that promotes transparency, respect for sovereignty and international law, stability, and free and fair trade. In both these endeavours, the United States is an appropriate and willing partner. As Indian Prime Minister Narendra Modi stated in his address to the US Congress in 2016, “[a] strong India-US partnership can anchor peace, prosperity, and stability from Asia to Africa and from the Indian Ocean to the Pacific.”

The US has been a principal architect and the traditional guarantor of a liberal economic and maritime order in the Indo-Pacific. While the commentariat in the US and India might express apprehension at the idea of US President Donald Trump’s ‘America First’ strategy, this moment must be seen as an opportunity to rebalance the Indo-US relationship to reflect a real convergence of strategic interests, as opposed to an abstract engagement based on values alone and one that has disregarded the core interests of both countries.

Even as the phrase ‘free and open Indo-Pacific’ replaces ‘Pivot to Asia’, it is clear that the US will continue to play an important role in the region.

The US is acutely aware that disengagement is not an option when the contests of the region are, in fact, irrevocably moving both westwards and eastwards, and ever closer to its own spheres of influence. Thus, maintaining an influential presence and assets in the region effectively responds to its agenda. The US continues to retain an unequivocally large military presence in the Indo-Pacific. Moreover, Washington appears intent on finding ways to address shortfalls in its defence budget. The most recent defence bill specifically authorises the establishment of the new Indo-Pacific Stability Initiative to increase US military presence and enhance its readiness in the Western Pacific. As it remains an invested actor across the Middle East and in Afghanistan, and as it confronts an unrelenting North Korea, it must seek to empower regional like-minded nations such as India, which it recognises as having an “indispensable role in maintaining stability in the Indian Ocean region.”

US Secretary of State Rex Tillerson’s remarks at the Center for Strategic and International Studies a few days before his visit to India in the fall of 2017 is a testament to the continuity of the relationship: “The increasing convergence of US and Indian interests and values offers the Indo-Pacific the best opportunity to defend the rules-based global system that has benefited so much of humanity over the past several decades.” In a way, the title of his speech, “Defining Our Relationship with India for the Next Century”, should set the tone for the Indo-US relationship; and this new direction must not be influenced even by changes in leadership in the two capitals. It must first be imagined and then crafted as a multi–decade relationship that engages with the disruptions that abound in a multipolar world. This 21st century partnership must take into account each country’s economic trajectory, political values and strategic posture. The Indo-Pacific region will be the theatre in which this partnership will truly be realised. Both President Trump and Prime Minister Modi seem cognizant of this reality, and are intent on creating a new blueprint for this long-term engagement.

The terms of this bilateral cannot be limited to maintaining the regional balance of power. Rather, both countries, in concert with other likeminded powers, have a stake in enabling and incubating a peaceful, prosperous, and free Indo-Pacific. As these countries align in their desire to see a new regional architecture emerge, the following present themselves as the most crucial domains where a strengthened India-US The New India-US relationship can have deep and influential impact in a region that matters to the whole world:

Defence trade and technology

India’s designation as a ‘major defense partner’ of the US, and the Defense Technology and Trade Initiative provide a bilateral platform for defence trade and technology sharing with greater ambitions and at a faster pace. The ‘Make in India’ initiative strengthens scope for coproduction and co-development. The new appetite for business reforms is catalysing the largest volumes of foreign direct investment ever received by the country.

As India undertakes broader defence transformation initiatives, US defence companies can collaborate with New Delhi in its USD 150 billion military modernisation project. They can do this by jointly identifying the gaps and working together to equip Indian forces in the short run. This must be followed by cooperation on advanced technologies to help build up the country’s defence manufacturing base in the longer term.

Continuous progress on these fronts will enhance Indian capabilities, enable greater readiness of Indian forces, and level the playing field. Specifically, priority military hardware, technologies and areas for joint production need to be identified. Pending sales, such as that of the Guardian RPVs, need to be expedited, along with the micro unmanned aerial vehicle project. Further, the matter of quality and subsequent liability of equipment made in India through joint Indian-US ventures needs immediate attention. Additionally, the hesitation of US companies in sharing proprietary and sensitive technology is a concern that will need to be taken up on a case-by-case basis.

Maritime freedom and security

There is a rare moment of clarity in US and Indian policy circles on the importance of each other in this region. This is important if the countries are to act as “anchor of stability” in the Indo-Pacific.

It is time to begin conversations on new arenas of military cooperation, intelligence sharing, and strategic planning, to include advanced platforms like fifth-generation fighters, nuclear submarines, and aircraft carriers. Already, the two countries share a maritime security dialogue, which was instituted in 2016, as well as working groups on aircraft carrier technology and jet engine technology. They should be strengthened further and complemented by new working groups.

The annual Malabar exercise, which now formally includes a third partner, Japan, is another key feature of military cooperation, improving coordination and interoperability. Adding to these efforts are the Logistics Exchange Memorandum of Agreement, which will create maritime logistic links, and a white shipping agreement which promotes regional maritime domain awareness.

India-US maritime security cooperation is critical because it supports efforts that prioritise joint stewardship for ensuring freedom of navigation and unimpeded trade across a maritime common that is a major conduit for commercial and energy supplies, and is rich in natural resources, ecosystems, and biodiversity. Moreover, the Indian Ocean Region is extremely vulnerable to extreme weather events that are likely to increase significantly in the coming years. To address these developments, the US and India can cooperate to provide humanitarian assistance and disaster relief missions in the region.

Further, the two sides are committed to resisting the aggression that China has displayed in the South China Sea and elsewhere in the Indo-Pacific. Indo-US cooperation in the Indo-Pacific must also serve to affirm the principles of freedom of navigation and peaceful settlement of maritime disputes.

An expanded bilateral maritime partnership that involves transfer of technology to build India’s capacity in the Indian Ocean Region will help create a more stable and balanced security architecture there. This same partnership should explore new forms and formats of joint exercises and naval drills, such as anti-submarine warfare and maritime domain awareness missions, and encourage support for Indian leadership as “force for stability” in the IOR.

Blue economy

India and the US must also collaborate to promote a market-driven blue economy as a framework for growth and prosperity in the Indo-Pacific — home to bountiful hydrocarbon, mineral, and food resources, as well as burgeoning coastal populations.

India and the US can further elevate cooperation in marine research and development to create common knowledge hubs and share best practices. They can collaborate to develop mechanisms and foster norms that ensure respect for international law. The US can support regional collaboration in the Indo-Pacific to explore new and environmentally conscious investment opportunities in maritime economic activities and industries, such as food production and coastal tourism. Direct investments in Indian efforts, such as in identified coastal economic zones and the Sagarmala initiative, and participation in regional groupings like the Indian Ocean Rim Association, are two ways in which it can do so.

Effectively, the US can support India in creating a resilient regional architecture in the Indo-Pacific that places an emphasis on stability, economic freedom, growth and maritime security.

Connectivity

Today, states in the Indo-Pacific are in dire need of funds and expertise to improve infrastructure development and regional connectivity. Beijing has introduced its own project — the Belt and Road Initiative — through which it is investing in infrastructure initiatives across Eurasia and the Indo-Pacific. While connectivity is undoubtedly the primary aim of the project, it is increasingly clear that China seeks to expand its political and military influence in the region under the aegis of the BRI. To prevent the emergence of an Asian order inimical to the rules-based order, states must work together to forge a more inclusive approach towards an emerging regional architecture. This framework must be willing to accommodate everyone, including China, in connectivity projects from Ankara to Saigon, or the sea lanes seeking to link ASEAN with Africa.

For this to occur, pragmatic, democratic, and normative powers need to first create a political narrative within which Asia’s connectivity will take place. This narrative must underscore the importance of good governance, transparency, rule of law, and respect for sovereignty and territorial integrity. This can then be posited against strictly bilateral projects such as the BRI, which burden participating countries with debt and environmentally unsound projects. This alternative proposition to China’s BRI can then become the blueprint for connectivity and integration from Palo Alto to Taipei, Bengaluru to Nairobi, and Tel Aviv to Addis Ababa. The possibilities are endless and straddle hard infrastructure, digital connectivity, knowledge clusters, and value chains in
the Indo-Pacific space.

The India-US partnership has an important role to play in this respect. The American vision of the Indo-Pacific Economic Corridor supplements India’s Act East policy, and India-US cooperation in physical and soft infrastructure can link cross-border transport corridors; help create regional energy connections; and facilitate people-to-people interactions. Further, India and the US can cooperate as “global partners”, with US investment in Indian projects in Africa. Accordingly, the Asia-Africa Growth Corridor proposed by Japan and India can provide a common platform to all three states. Further, the US can nurture burgeoning regional partnerships between Japan, South Korea, Australia, and India, as these countries work towards building a consultative and collective Asian framework.

Digital connectivity, trade, and technology

Digital connectivity merits particular attention. After all, in the next decade, the largest cohort of internet users will emerge from the Indo-Pacific region. China is working aggressively to ensure that digital platforms in the region will be influenced by its own model for cyberspace premised on sovereignty. A major part of China’s BRI is the new “information silk road”, which facilitates investments by Chinese companies in South Asia’s internet architecture.

Accordingly, the US and India must cooperate to ensure that digital platforms, trade, connectivity and norms are shaped according to the democratic and open nature of the internet. To do so, they must create a framework that responds to developing-country imperatives such as affordable access, local content generation and cybersecurity. Already, Prime Minister Modi’s ‘Digital India’ programme provides a model for other states in the region to use internet-enabled technology to spur economic growth. India’s Aadhaar initiative, a unique digital identity programme, has already generated significant interest amongst South Asian states. American companies have increasingly sought to adopt standards and technologies to leverage this platform and build new markets in India. For example, WhatsApp has integrated with India’s unified payments interface to provide digital payments. Examples of other development initiatives are also abundant. Elsewhere, the Google RailTel initiative aims to provide WiFi at 400 railway stations across India by 2018.

India-US bilateral cooperation in using the digital as a tool for economic development and empowerment can be the template to connect the three billion emerging users in other developing countries in the Indo-Pacific and across Africa. As digital norms are institutionalised — whether pertinent to data flows and e-commerce, or related to critical infrastructure, defence, and public services — there is a real opportunity for India and the US to build and subsequently provide a model working relationship for the digital economy. Effectively, the US and India can propose a set of ‘Digital Norms for the Indo-Pacific’ that can be operationalised under their various dialogues and mechanisms for cooperation in the region.

Read here – https://www.orfonline.org/wp-content/uploads/2018/01/ORF-Heritage-Hudson.pdf

Books, Defence and Security, Indo-pacific, Non-Traditional Security, Research, Writing

The new India-US partnership in the Indo-Pacific: Peace, prosperity and security