Records tell that India has a long distance to cover to contribute to the BRICS recent plan of working together to combat corruption. However, if the promise of corruption-free India till 2022 is taken seriously, India would be used as a model to follow in rest of the Asia.
Corruption still drags on India and China
Earlier this month, BRICS countries wrapped up their ninth summit, “Stronger Partnership for a Brighter Future” in Xiamen, China. The summit resulted in a concrete declaration to support international cooperation against corruption, including through the BRICS Anti-Corruption Working Group. The move comes as new developments from India and China show that it will be a long time before either of the association’s biggest members can truly contribute to the plan. However, recent initiatives to combat corruption in India have shown real promise – and can be duplicated elsewhere in Asia and other developing countries.
India: black money and bribery
Despite Prime Minister Narendra Modi’s pledge to end corruption by the country’s 70th birthday, India passed the mark with a slew of missed goalposts and disappointed expectations. Most recently, the Reserve Bank of India said that its move to ban large bank notes last November as part of an effort to crack down on bribery only appears to have accomplished the opposite. In the end, 99% of the demonetized 500- and 1,000-rupee notes were deposited or exchanged for new money. And the demonetization initiative didn’t only backfire; it also resulted in a wider slowdown of economic growth that affected agriculture, the rural economy, and property.
The failed scheme arrived soon after another major corruption scandal that laid bare the continued problem of rampant bribery in Indian hospitals. The issue was exposed following the deaths of 60 people in Uttar Pradesh hospital over five days due to insufficient oxygen supplies. The company providing the oxygen reportedly cut off the supplies after the hospital had repeatedly failed to pay their bills. In India, public officials frequently push their vendors for “commissions.” It’s common knowledge that even after public contracts are handed out, vendors still have to beg for payment, and the best way to guarantee a steady flow of compensation is to hand the officials in charge a “bonus”. When they were asked whom they blamed for the deaths, several parents of children who died due to lack of oxygen said “corruption.” The head of the medical college, who has now quit, was already suspected of mishandling public funds.
The China example
Like Modi, President Xi Jinping has also been leading a much-publicized campaign to crack down on bribery among civil servants and corporations in China – which, despite the prosecutions of thousands, has had mixed results so far. For instance, China’s new anti-corruption “super agency” will start work in March 2018, but the draft State Supervision Law that sets up that body has not been made public. What is known about the agency and the law signals that the government will only entrench a broken system, not fix it. According to Human Rights Watch, the agency will consolidate anti-corruption powers that are currently distributed among different government agencies, gain new powers of detention, and most worrisome of all, share space and staff with a powerful Communist Party body that is charged with enforcing Party rules. At a time when even China’s own regulatory officials continue to be charged with graft, consolidating anti-graft bodies in such a way seem no way to tackle the problem.
Not surprisingly, the same corruption that seeps throughout government agencies has affected the private sector, as well. One of the biggest cases involved British drugmaker GlaxoSmithKline. Mark Reilly, the former China boss of the company, and two other colleagues were charged with corruption in 2014 following a 10-month investigation into how the firm made billions of dollars by bribing medical staff and hospitals. Because of cases like this, healthcare has become the main focus for the president’s campaign against corporate graft, with global and Chinese healthcare companies including Bayer and Nestlé becoming the subject of probes for corruption.
In his address to the Indian people during Independence Day celebrations last month, Indian Prime Minister Narendra Modi insisted that there would be a New India by 2022 – one that would be “free of casteism, terrorism, corruption, nepotism.” In order to fulfil these promises, however, New Delhi will need a more realistic plan to tackle graft by the time it celebrates three-quarters of a century. One promising new initiative comes from a number of large firms, which are joining up in support of better ethics and business practices in India and South Asia. The firms plan to work with the business ethics advocacy group Ethisphere Institute to create a strategy to make anti-corruption a regular part of everyday business considerations and conversations. If successful, such a plan could be duplicated in other Asian countries, not least China.
On top of such private-driven initiatives, New Delhi and Beijing alike must enforce broader, international initiatives, like the OECD’s Anti-Corruption Action Plan for Asia and the Pacific. The plan, which was originally formed in 2001, is formally endorsed by 31 countries today including India and China. But endorsing the plan simply won’t be enough. Both countries must do more to carry it out effectively, such as crafting and enforcing more laws to proscribe conflicts of interest and simplifying mechanisms for anonymously reporting instances of bribery.
These private- and public-driven initiatives to combat corruption are only some of the many tools at the disposal of India and China. Now, with both countries continuing to score low in international measures of transparency, it’s up to them to not only issue declarations about the importance of combatting corruption, but also to take concrete action. Otherwise, statements like those issued at the BRICS summit will remain nothing but that.
India’s Military Spending and South Asian Security
Over the past several years, unprecedented military modernization in Pakistan’s immediate neighbour, India, has worsened South Asia’s security environment. India’s heavy military spending and its unstoppable quest for the acquisition of sophisticated weapons have threatened regional stability. Indian desire to acquire global power status through military means has further been intensified as a result of US assistance particularly in former’s defence sector. Within quick span of time, defence trade between India and the US has shot from $1 billion to over $15 billion leaving other regional powers in the state of security consciousness.
India’s obsession with its military build-up doesn’t end here. According to the Stockholm International peace Research Institute (SIPRI) a prestigious international institute dedicated to research into conflict, armaments, arms control and disarmament, India, once again tops the list as world’s largest weapons importer. This is not a new development as previously, India also topped the list for the same reason.
As per SIPRI estimates, Russia remains top arms supplier to India. However, surprisingly arms deliveries from the US increased more than six-fold in the five-year period to the India. This trend in long run will definitely reduce market space for Russian arms and ammunition to India.
Despite the fact that, India’s unbridled military modernization is the primary impetus behind South Asian instability, global power’s economic expediencies in South Asia also undermines delicate conventional parity between India and Pakistan. For instance, Indo-US strategic partnership, which apparently touted as US’ China containment policy, seems more of a Pakistan containment policy. Much of the US provided weapon-tech to India is more useful against Pakistan in a conventional warfare. Almost 70% of Indian military troops and weapon system are deployed against Line of Control, (LOC). Interestingly, peaceful settlement of Docklam issue between China and India as well as sky-rocketing bilateral trade between both countries, which has reached to $84.44 billion last year, makes prospects of conflict almost impossible.
However, in contrast to aforementioned facts, the influx of massive military hardware from western capitals to India continues and in certain cases the flow of arms has gained momentum. There are two primary motives behind India’s overwhelming spending in defence industry.
First, India aspires for greater role in global environment and in certain ways it has been demonstrating its will and capability to influence global dynamics. India’s successful test of Agni-5, a long-range ballistic missile, capable of carrying nuclear weapons with a strike range of more than 3,000 miles, is a practical demonstration of its military capabilities to influence other powers around the globe. For hawkish policy makers in New Delhi, a strong military power can extend India’s global influence.
Secondly, India is following a policy of coercion at regional level primarily, against Pakistan which shares history of hostility and violence due to longstanding territorial disputes such as Kashmir. There is growing perception in New Delhi that militarily strong India can dictate South Asian affairs. That’s why India has been consistently opposing diplomacy and dialogue for peaceful resolution of disputes. Therefore, to meet its foreign policy goals, which are based on coercion and usage of hard power, India spends massive in military build-up.
Ironically, South Asia is called as nuclear flashpoint due to history of animosity and violent conflicts between India and Pakistan. With its mighty military power, India has emerged as the most potent threat for not just Pakistan but also a security challenge for other powers in the region.
Given the advantage it has in terms of nuclear missiles, military hardware and submarine fleet, India has been trying to create an environment conducive to wage limited war against Pakistan. For that, India has not just developed its military doctrine, Cold Start Doctrine, but also initiated and sponsored sub conventional war in Pakistan’s chaotic province, Balochistan.
In such circumstances, Pakistan needs to maintain delicate conventional military balance vis-à-vis India. Despite the fact, Pakistan has been facing number of issues at national, regional and international levels which include on-going military operation in tribal areas to hostile border skirmishes; a robust military modernization plan has become inevitable. A militarily strong Pakistan will be able to maintain its territorial integrity against aggressive yet militarily mighty India.
It’s an open fact that Pakistan has consistently called for peaceful resolution of all outstanding disputes and it has offered to resume diplomacy and dialogue over Kashmir dispute. Unfortunately, India’s cold response has not only restricted Pakistan’s peaceful overtures but also refused to accept third-party mediation in peaceful settlement of Kashmir issue. This clearly shows that, current ruling regime in India is not serious for peaceful settlement, rather more inclined to use of force and coercion. Under such circumstances, Pakistan needs to strengthen its force posture to pre-empt any kind of misadventure from its adversary. However, Pakistan, as it has done in past, must embrace peaceful overtures to bring stability in the region.
US Call for a New Relationship
‘Trust, but verify’ an Old Russian proverb that President Reagan liked to repeat often. Trump is neither the first President nor he is going to be the last to criticize Pakistan of deceit and threaten to cut off American assistance. Notwithstanding, the last six decades of the US support, the US has failed completely in cultivating an ally in Pakistan nor has it meaningfully changed the nature of its relationship with Pakistan, which can be best described as ‘transactional’. A quid-pro-quo relationship between the two has never been established with regards to the assistance they both offered to each other. In truth, United States has never really trusted Pakistan.
President Trump avowed in his New Afghan Strategy that the US has been paying Pakistan ‘billions of billions of dollars at the same time they are housing the very terrorists that we are fighting for’ but the mantra should be put to a halt. Likewise, the US must be conveyed boldly to stop continuing its false claims that Pakistan shelters the ‘agents of chaos’ and be reminded that friends don’t put each other on notices.
Similarly, statements and avowals that India now is a strongest ally to the US, disturbs Pakistan, chiefly because of the irony at Trump administration’s part which only sees the glittering Indian market but pay no heed to the growing Indian cease fire violations across the LoC and the atrocities India commits against the unarmed civilians of the Indian held Kashmir.
The recent visits and statements however by the senior US officials and Trump’s aides reflect the US call for a new relationship between the US and Pakistan, which once used to be close allies in the US led ‘Global War on Terror’.
Pakistan’s foreign policy makers at this point in time must be mindful of the fact that the US is a major trading partner and should adhere to a relationship more than ‘transactional’. Moreover, the risks and fears at the US part of ‘rampant destabilization and civil war in Afghanistan’ increments further the region already devoid of trust. For, nobody actually knows whether the US will stay or eventually leave Afghanistan.
The Afghan war has now become a war of logistics, in words of Sun Tzu ‘the line between order and disorder lies in logistics’, Pakistani supply lines thus provide Islamabad with a leverage in absence of shorter, cheaper and acceptable alternative routes. Given these circumstances, Pakistan should make best use of the US call towards a more robust bilateral relationship.
The move for a ‘new relationship’ and improved ties began last week with senior Trump aide’s visit to Islamabad to hold talks with Pakistani leaders. Earlier also the impressions that Pakistan and the US were on a collision course were dispelled by a top US general. Likewise, US department’s acting Assistant Secretary for South and Central Asia Alice Wells asserted that the US was not thinking of cutting its ties rather assured that the US still cogitate Pakistan indispensable to the resolve in Afghanistan.
The aforesaid developments clearly indicate that the strained US-Pakistan relations would improve soon and that the suspension in the military aid is also not permanent.
To conclude, achieving long term stability and defeating the insurgency in the region will be difficult without Pakistan’s support and assistance.
Special Economic Zones and CPEC
Economic Expansion, high prices and inflation are the issues on which one can talk for hours. The scarcity of resources, energy crises and lack of industrial modernization are the challenges which Pakistan has been facing for past many decades. Despite the advantages of geographical setting, the country could not sufficiently expand its economy until 20thcentury. However, the China-Pakistan Economic Corridor (CPEC) has brought with it various infrastructural, energy, and industrial projects that show smooth progress in these sectors. One of the most significant developments is the establishment of Special Economic Zones (SEZs) under the Long Term Plan (LTP) of CPEC.SEZ is a physically protected area with definite geographic boundaries under which the investors and the developers enjoy duty free benefits and streamlined procedures, set up by the government. After the successful completion of the Early Harvest Program (EHP), the governments of China and Pakistan aspire to complete the Long Term Plan (LTP) of CPEC. As a key route to success, the LTP has been divided into three phases and the work on the first phase has already started. SEZs are on the first priority list of the first Phase of LTP. While utilizing the strategic location of Pakistan and the rich resources, the SEZ will contribute a framework for Pakistan’s domestic industries, and local economy.
The government has planned to establish nine Special Economic Zones (SEZs) in all the four provinces, federal areas and Gilgit-Baltistan under the framework of CPEC, which would be completed in a period of three years. Pakistan has conducted feasibilities of 5 SEZs which focuses only on the infrastructure. The three prioritized SEZs to be completed in the first phase of LTP are M3 Industrial City in Faisalabad, Punjab, Chinese SEZ Dhabeji, Sindh and Hattar SEZ in KP province. While the remaining six sites include Rashakai Economic Zone, M-1 Noshera, Bostan Industrial Zone District Pishin, AllamaIqbal Industrial City, Moqpondass SEZ in Gilgit-Baltistan, ICT Model Industrial Zone Islamabad, Development of Industrial Park on Pakistan Steel Mills Land at port Qasim near Karachi, Special Economic Zone at Mirpur AJK, Mohmand Marble city.
Although, there are general misunderstandings regarding the industrial ramifications of the SEZ’s under CPEC due to large number of Chinese firms and the exemption in the tax rates offered to them. However, the LTP of CPEC shows that these SEZ’s will offer the country with a great opportunity to accelerate industrialization because they are beneficial for all the international and domestic investors. So far in the history, SEZs have been the reason of economic boost in countries around the globe. Now this is a matter of concern that either these SEZs will make Pakistan a center of economic modernization and trade ventures or not. The economist and financial experts are optimistic about Pakistan’s emergence as one of the fast growing and promising global economy.
While stepping towards the era of industrialization, Pakistan faces a number of issues that have so far refrain the industries to understand their growth potential. Some of the chief hindrances to investment in Pakistan include poor security; non-availability of infrastructure and power crises, rent-seeking regulators, and cumbersome tax administration, etc. among many others.
Likewise the entrepreneurs in Pakistan have certain reservation with the incentives proposed by the government and SEZs for the investors and enterprises including ten-year exemption from all taxes on imported capital goods and exemption from tax on income accruable from development and operations in SEZs for a period of ten years. Although these incentives will be beneficial for the foreign investors at large but at the same time it will provide Pakistani enterprises with the opportunity to collaborate with the Chinese firms and launch joint ventures of mutual interests and benefits. This will be further beneficial for the annual Gross Domestic Product (GDP) growth of Pakistan. Moreover it will bring Foreign Direct Investment (FDI) in the country thus generating the foreign revenue.
Subsequently it is significant to keep in mind that in Pakistan there are certain security and political factors due to which the SEZ’s may face challenges. Hence forth to conquer these challenges provincial harmony among all the provinces and mutual consensus between the public sector and private sector is needed. SEZs under CPEC will be a life-time opportunity for Pakistani companies to work together with Chinese companies for the development of export-oriented manufacturing industries. Therefore, Pakistan should increase its products in the Chinese market and raise the ratio of its export while decreasing the trade deficit by lowering the imports.
Belt and Road Initiative and China-Iran cooperation
Over the past two weeks, the National People’s Congress of China (NPC) and the Chinese People’s Political Consultative Conference (CPPCC)...
Movement of the White House towards radicalism
The removal of U.S. Secretary of State Rex Tillerson from power and the replacement of CIA chief Mike Pompeo will...
231,000 New Jobs Added in Western Balkans amid Ongoing Economic Challenges, Emigration
A 3.9 percent increase in employment over the last year has led to the creation of 231,000 new jobs throughout...
Access to safe water: Is the green revolution around the corner?
Nature-based solutions can play an important role in improving the supply and quality of water and reducing the impact of natural...
Assad’s Army and Intelligence Services: Feudalization or Structurization?
Authors: Anton Mardasov* & Kirill Semenov 2017 marked a turning point in the Syrian conflict. With the full support of...
Energy is at the heart of the sustainable development agenda to 2030
Three years ago, all countries of the world adopted 17 ambitious policy goals to end poverty, protect the planet, promote...
Economic Growth in Gulf Region Set to Improve following a Weak Performance in 2017
The Gulf Cooperation Council (GCC) region witnessed another year of disappointing economic performance in 2017 but growth should improve in...
Middle East3 days ago
Three Years of Saudi Heinous Crimes in Yemen
Africa3 days ago
The World without Colonies – Dakhla without Potemkin Village
East Asia2 days ago
Ice Silk Road: From Dream to reality
Intelligence2 days ago
Russia Says U.S. Trains Jihadists to Do Chemical Attacks Blamed Against Assad
East Asia17 hours ago
Shooting an Own Goal: China’s Belt and Road funding terms spark criticism
Intelligence2 days ago
From Radical Ecology to Ecoterrorism
Eastern Europe20 hours ago
Financial challenge for Lithuania
Americas3 days ago
What Results When U.S. Invades a Country