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India and the Indo-Pacific: Challenges and near-future agenda

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The coming into use of the term “Indo-Pacific Region” suggests the growing economic and strategic role of India on the changing geopolitical landscape. Such a concept places India at the center of this landscape, while India’s peripheral presence in the Asia-Pacific region is now a thing of the past.

The ultimate goal of India’s strategy in the Indo-Pacific Region (IPR) is to create a mobile system of geopolitical balances amid the growing influence of China and the resulting interest in the region from the United States and other Western countries.

Initially, New Delhi gave priority to the coastal zones of the Bay of Bengal, the Arabian and South China Seas, with a view to create a chain of friendly states that would stretch from the Gulf of Aden to the eastern tip of the South China Sea.

In this regard, not surprisingly, India has moved to a strategic partnership with the states that are located at the extreme poles of this chain – Oman and the Philippines. India has established an effective military and defense cooperation with Oman. Indian Navy officers provide instruction for representatives of the Royal Navy of Oman, the Indian Air Force uses Oman airfields to refuel, and the armed forces of both countries regularly engage in joint military drills.

New Delhi has been practicing the same cooperation format with the Philippines. Ships of the Indian Navy and the Coast Guards frequently call at the Philippines’ ports, both parties are cooperating in military logistics and fighting against terrorism. Manila and New Delhi have signed over forty agreements on cooperation in various sections of the economy.

Established in 1995, the Indian Ocean Rim Association (IORA) became a manifestation of India’s desire to create a political and economic partnership of  the coastal states.

Members of IORA are states that stretch from Iran along the east coast of Africa to South Africa, Madagascar and the nearby island states and states of South and Southeast Asia, from Bangladesh through Thailand, Malaysia, Singapore, Indonesia to the South-West Pacific (Australia, New Zealand ).

Although India favors freedom of navigation and trade in the Indian Ocean, it is also interested in restricting the political influence of countries located outside the region that do not share the common political and economic interests of regional players. It means China. IORA is a flexible instrument for the consolidation of the region where “outsiders” can enter as interlocutors and partners in dialogue.

Along with the coastal zones of the Indian Ocean, Indian diplomacy is paying more attention to the island states in the Pacific Ocean. For New Delh, relations with these states are part of the “expanded neighborhood” policy. The development of relations with both coastal and island states makes it possible to reveal the practical use of the geopolitical essence of the concept of the Indo-Pacific region.

Even though India does not have a permanent military presence in the South Pacific, it is interested in it for geopolitical reasons. For this, the Indian Navy will have to expand their activity zone by using the Andaman and Nicobar Islands as  “springboards” in the east. In this case, military diplomacy cooperation will have to expand too. So far, India has permanent diplomatic missions in Papua New Guinea and Fiji, but without military attaches.

Strategic thinking requires of the Indian leadership to promote partnership with the following countries and international collective structures:
– USA, Australia, Japan (within the framework of the four-party Quad dialogue) and New Zealand;
– Chile as a flank state of the South Pacific adjacent to French Polynesia through the Chilean Sea (a political and legal concept denoting the Pacific waters belonging to Chile);
– France, proceeding from Paris’ consent to provide the Indians with the possibility of using French military bases in the Pacific;
– An advance group of Melanesian states (MSG) composed of Fiji, Papua New Guinea, Vanuatu, the Solomon Islands and Indonesia (associate member). The strengthening of the group’s negotiating positions will expand India’s diplomatic presence in Melanesia;
– Forum of Cooperation of India with the Pacific Island Countries (FIPIC);
– Iran, as a Shiite state, due to the growing influence of Beijing in Sunni Pakistan (China invests in the Pakistani port of Gwadar,  India – in the Iranian port of Chabahar);

– Fiji, considering a substantial number of representatives of the local Indian diaspora, the dynamic development of Fijian-Chinese relations, Fiji’s active foreign policy and the coincidence of India’s political course “Look East, Act East” with Fiji’s “Look North”;

What plays into India’s hands is that five of the fourteen island states of the South Pacific are in free association with western powers – Cook Islands and Niue are in association with New Zealand, while Marshall Islands, Palau, Federated States of Micronesia – with the United States. The more so since Wellington and Washington support the strengthening of India’s role in this part of the world.

In the foreseeable future, the Indian leadership faces the challenge of increasing financial assistance to Pacific island nations and reaching agreements on joint economic projects. At the moment, the assistance provided by India is insignificant, while the volume China’s aid has surpassed the assistance provided by New Zealand, is almost equal to the financial injections from the United States and is second only to Australia.

First published in our partner International Affairs

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What ails Modi’s relations with its own people and neighbours?

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The veneer of “democracy” cloaks “autocratic and hypocritical” style of Modi’s government. Modi first tried every Machiavellian trick to suppress the farmers’ protest movement against the three farms laws. He tied to sow seeds of discord among them by portraying them as “Khalistani” through a multitude f fake social media accounts.  He then tested the protester’s patience by letting the movement linger on for a years. He allowed police to beat them mercilessly. Tried to turn the Supreme Court hostile to them. And finally a farmer was mowed down under a vehicle (Lakhimpura incident).  About seven hundred farmers including some women lost their lives. But, Modi shrugged off the claim saying their deaths were due to natural causes. He kept insisting that the laws were enacted for farmers’ welfare. And they would repent their repeal. The farmers saw through the ruse and stayed put. The laws were finally withdrawn without any discussion. This gesture strengthened the opposition’s allegation and farmers’ perception that the laws were meant to surreptitiously benefit the crony capitalism (Adanis, Ambanis, et al).

Modi deprived the disputed Jammu and Kashmir of even its nominal statehood without caring a fig for sentiments of the common man or the politicians. He is unwilling to repatriate the Occupied Kashmir widows or wives of so-called militants. Instead of repealing draconian laws, he is killing innocent Kashmiris in fake encounters (Hyderpora encounter being the latest). In 1990s, India’s reign of terror forced large number of Kashmiri natives to cross over into the Azad Kashmir.  India launched operation ‘Sadbhavana’ to lure back the refugees. Some refugees even married the Azad Kashmiri nationals.  Those who returned mostly wives or divorcees had been suffering immeasurably being without nationality documentation. Indian government could have deported them back to Azad Kashmir. But, India flouted its own promise of rehabilitation and international norms by denying them nationality.  Defying restrictions, hundreds of wives protested in Srinagar and held a press conference (November 21, 2021) to highlight their plight. Modi is unwilling to repatriate the widows or wives. Be it observed that Pakistan immediately returns innocent border crossers back to India.

Modi imposed a corrupt friend (Patel) as governor of Lakshadweep (32 square kilometers), a predominantly Muslim archipelago of 36 islands (10 of which are uninhabited). It is sparsely populated with population of 63000, growing at about six per cent against national average of 17 percent.

The governor issued many orders which were perceived as anti-Muslim. For instance, no-one could slaughter a cow without a permit but liquor was allowed in all the islands ostensibly to promote tourism. The government could acquire any piece of land from inhabitants in national interest.  The isles are in COVID grip and the people used to airlift the sick to nearby Kerala. The governor ordered that no sick shall be flown out without the governor’s permission. The people interpreted the governor’s move s as an effort to impair their life style and links with Kerala. He wanted to facilitate the isles link with Mangalore (Karnataka). The islanders are convinced that the Centre is trying to depopulate the island and convert into a naval base. Within framework f QUAD, the Modi government wants to strengthen “Chagos-Lakshadweep-Maldives choke”.

India’s volatile North East

At the time of partition, India was in grip of countless insurgencies and separatist movements (Dravidstan, Khalistan, Bodo, Nagas and Mizos). It is still a simmering cauldron. India’s north east was a porous border. Through deceit, coercion, and financial incentives, India mellowed some of the insurgencies. Ambushes and confrontations still take place in some north eastern states. Indian bowed to insurgents’ demands for the creation of new states. And, insurgency leaders became chief ministers! India forgot yesteryear when they used to burn to ashes copies of the Indian constitution and uproot rail tracks. Tamil Nadu, Andhra Pradesh, Nagaland and East Punjab merged into the Union.” India has become synonymous with a thousand insurgencies waged by mysterious outfits, known only by their acronyms. It has become synonymous with grandiose announcements by successive prime ministers of many thousand crore packages that disappear without trace, leaving a handful of political brokers very rich. And in the Indian bureaucracy, a posting in the Northeast is treated on par with incarceration in Siberia” (Swapan Dasgupta, India’s Siberia, Rediff dated October 2004).

Neighbourhoods

Pakistan

Modi‘s “might is right” style is conspicuous from India’s policies towards her neighbours. India’s former foreign secretary Shyam Saran (How India sees the World) thinks none of the disputes with Pakistan are intractable. They were almost solved except for lack of political will to sign the final draft deals. To pander to the galleries, India’s home minister Amit Shah roared in Parliament that “Aksai Chin and POK (Azad Kashmir) are part of India. And we would lay down our lives to get them back”.

Nepal

To topple KP Sharma Oli’s government, Indian embassy in Nepal had been bankrolling corrupt politicians and other members of Nepalese society. Oli was ultimately ousted by Supreme Court of Nepal and appointed the new prime minister until the next elections. Oli

debunked India’s conspiracies during a ceremony to commemorate sixty-ninth anniversary of the Party’s popular leader Madan Bandari. He claimed, `Conspiracies were being plotted against him since the constitutional Nepali map amendment’.  No-one thought that a prime minister would be removed from office for printing a map’.

Be it observed that Nepal amended its map when its objections fell flat on India. India’s defense minister Rajnath Singh, went ahead to inaugurate an 80-kilometer-long road connecting the Lipulekh Pass in Nepal with Darchula in Uttarkhand (India). Indian army chief insinuated that Oli was being prodded by China against India.

After being ousted by the Nepalese Supreme court, Oli continued to criticise India’s machinations. Inaugurating the 10th general convention of the Communist Party of Nepal (Unified Marxist-Leninist) in Chitwan, Oli claimed if his party comes back to power it will “take back the disputed territories such as Limpiyadhura, Kalapani and Lipulek from India through dialogue”. The Lipulekh pass is a far western point near Kalapani, a disputed border area between Nepal and India. Both India and Nepal claim Kalapani as an integral part of their territory — India as part of Uttarakhand’s Pithoragarh district and Nepal as part of Dharchula district. (‘Will ‘take back’ Kalapani, Lipulekh from India, If…’ KP Sharma Oli. One India, November 27, 2021).

Maldives

Indo-Maldivian relations are no longer hunky-dory. They are rather in a state of flux. India reneged on contract to supply a hundred thousand doses of corona virus vaccines to Maldives. So did India despite that fact that it views the current president Solih as pro-India as compared to Yameen the previous president. India withheld supplies thoughMaldives had already paid the cost.  In perhaps a tit-for-tat, Maldives banned all Indian tourists including films stars.

Fluid political situation in Maldives

There is a widespread impression in Maldives that India has subjugated the country’s sovereignty through a host of treaties. The present president Solih is perceived as an Indian stooge. People resent granting immunity to Indian forces in Maldives and allowing construction of military infrastructure. The subsurface resentment led to “India out” social media campaign. The Indian High Commission became terrified of the ferocity of the protests. And, it sent a note verbale to the Maldivian government for protection of its staff.

President Solih is up against opposition from within his party. Through a tweet, Nasheed, the former President and at present Parliament Speaker, has highlighted corruption scandals against President Mohamed Solih9 (‘ventilator-import scam). Nasheed tweeted “I see the government colluded in this… I do not want the MDP to stand by a government that steals,” adding that he would ‘not budge’ against attempts to put a lid over the scandal.  He alluded to the Health Ministry  MVR 34.50 million (US$ 2.2 million) contract to Dubai-based Executors General Trading to procure 75 ventilators. The Auditor General’s office found out that nearly 90 percent of the contracted amount was paid in advance without any ‘performance guarantee.’ It was found that only 15 of the 75 ventilators were received.

The ruling party’s internal rift portends that it may be ousted in next general elections. Mr. Nasheed is likely to put himself as a presidential candidate. Already, the -ruling Maldivian Democratic Party (MDP) could not sweep the municipal elections. It  secured 43 percent of all seats, with opposition Progressive Party of Maldives (PPM) having won 34.9 percent.

Bangladesh

India is not sincere even with Bangladesh. At India-Bangladesh Business Forum, in Delhi, Bangladesh PM Sheikh Hasina expressed grief (Oct 4, 2019) on the onion crisis in her country. Hasina taunted, `We are facing crisis on the onion issue. I don’t know why you have banned onion export. Maine cook ko bol diya ab se khana mein pyaaz bandh kardo. (Indian Government had banned export of Onions on September 29).

India is the biggest supplier of onions to Bangladesh, which buys a yearly average of more than 350,000 tons. India abruptly slapped a ban on onion exports to Bangladesh. Following the export ban, onion prices in Bangladesh jumped by more than 50 per cent, prompting the government to procure supplies from elsewhere.

In retaliation, Bangladesh’s involved the Chinese in a proposed $300 million project in the downstream of Teesta River.

India claims that Bangladesh is her close strategic and economic friend within its `Look East, neighbour’s-first policy”. But, the history of broken promises indicates that India looks to its own interest. A raft of issues from water disputes to religious tension mask mistrust in the relationship.

India backed out of its agreement (December) with Bangladesh to supply 30 million doses of AstraZeneca vaccine, developed by Oxford University in cooperation with the Pune-based Serum Institute of India. The Institute announced that India had barred Serum from selling doses on the private market until everyone in India had received the vaccine.

Later, Salman F. Rahman, a Cabinet minister and co-founder of the Beximco Group, a Bangladeshi conglomerate, took over the responsibility to distribute three million doses of the AstraZeneca vaccine in Bangladesh.

Concluding remark

Modi government is insincere not only in dealing with its own people but with also its neighours. 

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China’s rise in power and India’s rise in fear: Strategic hedging amidst growing threat

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India, the nation long being under colonial oppression started its journey of foreign policy with the ideology of Pt. Jawaharlal Nehru’s Non-Alignment; abstaining from taking sides of the bipolar power blocs and securing its newly gained national sovereignty and independence. But soon after, it realised the crux of surviving in the internationally interlinked world that the countries were fast approaching towards. Therefore, in 1971, India joined hands with the Soviet Union in a Treaty of Friendship, but with the disintegration of Soviet Union in 1991 and the United States emerging as the sole superpower, India felt back into the state of isolation and helplessness.

As the famous saying goes on to say “don’t put all your eggs in one basket”, India soon learnt from its mistakes to not put all its might and trust into one entity as concepts such as ‘trust’ and ‘no strings attached’ are non-existent elements of global politics and international relations.

Today, the 21st century is largely seen as an ‘Asian century’, the century where Asia’s burgeoning economy and demographic dividend will make it rise to everyone’s notice and be the talk of the center stage. This is what is envisioned by experts and to no surprise it is what is slowly molding to be the fact; a fact that is greatly favoring the People’s Republic of China.

Despite the pandemic’s birth from Wuhan and the global economic stagnation in 2020, China managed to log 2.3 percent growth for 2020, becoming the only major economy that grew during a year when the virus exacted a devastating global toll (Gerry Shih, 2021). This shows the success rate of the country into turning its far-sighted ‘China Dream’ a reality. It is of no surprise that the rise of China is rampant, aggressive in some instances, strategic and far-sighted into changing the existing world order; posing a threat to the rest of the major power houses today.

India, being the largest rival neighbour to China has a lot at stake, for which it has shifted its foreign policy from hedging for to strategically hedging against the collective threat imposed by China. Contemporary geopolitical and strategic circumstances present a multifaceted challenge to India’s foreign policy, with regards to its neighbourhood, border and the Indian Ocean region, for which incorporating a pragmatic realpolitik approach is the need of the hour.

What balancing China means is to strengthen India’s capacity and linkages in order for it to be well-equipped to counter Chinese aggression. India has been working towards this aspect in the following ways-

-India has embarked on its own “Diamond Necklace” policy to counter China’s ‘String of Pearls’ through which it is building ports in strategic points such as Singapore, Indonesia, Oman, Seychelles and Iran and strategically cooperated with Mongolia, Japan, Vietnam and the Central Asian regions.

-India-Russia and Indo-Pak relations although sour, have been tried to reconcile in the recent past as maintaining a somewhat cordial relationship with China’s ally should be one of India’s priority as both the nations are militarily heavy. India has built its defence cooperation with Russia and Putin recently told that “there is no contradiction in the relationship with India”, giving it a stronger tie. Russia has also managed to show great support to India during its fight for Pandemic. Maintaining this cordial relationship is of great benefit to both and is a way towards balancing relations.

-In addition to all this, what is more important today to withstand international threat is the coming together of like-minded states that are willing to support each other and target China with a common motive. India has therefore, signed bilateral and multilateral agreements on different fronts to achieve its hedging goals, which will be further looked upon ahead in the paper

-Along with external ties, India needs to be well-equipped domestically as well by building up its defence capabilities. It is here that India’s ‘atmanirbhar’ (self-reliant) initiative plays importance.

However, on the flip-side, India cannot manage independently without China. The two being giant players in Asia with the two largest populated countries in the world and more so, being geographically in close proximity and economically dependent on each other, it is inevitable for them to have zero contacts. Therefore, whilst battling China’s String of pearls and border disputes, India must also be wary of having a middle ground with China wherein it can conduct its peaceful coexistence and continue its trade relations.

Overall, it can be said that New Delhi’s policy of strategic hedging works on a mode of attempting to find a modus vivendi with Beijing, while also slowly moving towards building security and political links with other regional and international powers as an insurgence against China. The Modi government has adopted a mixed strategy towards asymmetric rival China by maintaining a relationship of cooperation at the regional level (the Asian Infrastructure Investment Bank), competition at the regional level (Indo-Pacific), rejection of China’s unilateral initiatives (Belt and Road Initiative), and deterrence along the Himalayas and in the Indian Ocean (Manjeet S. Pardesi, 2021).

When the survival of a state is threatened by a hegemonic state or a coalition of stronger states, they seek to join forces with other states and establish an alliance to preserve its own independence by keeping in check the power of the other state. This is the Balance of threat theory (Stephen M, 1985), wherein the threat levels can be affected by geographical proximity, offensive power, and aggressive intentions and when all this is together met with one nation alone, the severity of forming coalition and strategically hedging speaks for itself.

The United States

If the rise of China poses a direct threat on someone, it is United States’ hegemony. US being the super power in the globalized multipolar world, while India being the largest democracy, an emerging economy and a key important player in Asia proves both the states to be in a mutually benefitting coalition.

The two biggest democracies have joined hands on various fronts such as pursuing the joint interest in freedom of navigation in the highly contentious South China Sea where China has shown a great deal of interest as well. The US recently has shown a shift in their focus to the Asia-Pacific region through its new policy of Trans-Pacific Partnership (TPP) and its decision to station 2500 marines in Australia. This has been regarded by China, who staked claim over South China Sea, as a hedging strategy if not outright containment by the USA. In 2020, Indo-US ties have elevated to a “comprehensive global strategic partnership”. This has been a great achievement in India’s vision for development. Moreover, both the nations have successfully concluded three 2+2 dialogues, wherein USA reiterates to support India in defending its territorial sovereignty against the “greater threat”, referring to China. In addition to these, the highlights also follow the four foundational agreements between the two nations, which are – Communications Compatibility and Security Agreement (COMCASA), General Security of Military Information Agreement (GSOMIA), Basic Exchange and Cooperation Agreement for Geo-Spatial Cooperation (BECA) and Logistics Exchange Memorandum of Agreement (LEMOA). The two nations have also released a Joint Statement on shared Indo-USA goals in the Asia-Pacific region. The developments so far have been quite beneficial on both sides and are a great strategic hedging handling on India’s part. And to top this policy of strategic hedging is the establishment of QUAD (Quadrilateral Strategic Dialogue) between the four members- United States, Japan, Australia and India with their common vision of securing global order, liberal trading and freedom of navigation between the countries. The informal dialogue between these four nations has seen to be a driving force is curtailing a ‘rising China’.

Japan

India’s foreign policy is built on its three foundational pillars, which are security, economic development and status and Japan plays quite a significant role in all three aspects. This bilateral relation is of great benefit to India. Japan and India’s upward trajectory gives it a status of being ‘Special Strategic and Global Partnership’, transforming the relation into a ‘cornerstone of India’s Act East Policy’. The relationship between Asia’s largest democracies is deemed to be Asia’s fastest growing relationship as well. Japan was the first country with which India held its 2+2 ministerial level dialogue which along with military and defence talks, also shared concerns of China’s rise in the region.  As Japan acquires world class navy and high-tech capabilities; if the two countries continue to add concrete securities, a high hope is instilled in this strategic relationship of becoming a game-changer in Asia. The two countries have already deepened ties in the field of maritime defence and infrastructure such as the construction of India’s first high speed railway corridor between Mumbai and Ahmadabad.

Australia

The two nations have had a cordial relationship even before independence and continue to share common interests in trade, sustainable development, and student-to-student ties. It has been building its strategic partnership and recognizes India’s critical role in the Indian Ocean and therefore, the two nations are committed to working together to enhance maritime cooperation, along with engaging in a naval exercise called AUSIDEX since 2015. Trilateral engagements with crucial nations like Indonesia and Japan, deeper engagement with regional groups like the Indian Ocean Rim Association and East Asia Summit and the very efficient quadrilateral dialogue with Japan and US have all contributed in strengthening the ties between India and Australia. A cordial relation with Australia will help India in the long run as by 2027, India is expected to have world’s largest population and henceforth require the up-skilling of 400 million people. Australia is well-equipped to assist with this huge need for knowledge-sharing, education and skill development. The two countries also have enormous potential to build on their people-to-people links and thus their soft power influence (Parakkal, 2018). India is the third largest source of immigrants to Australia and the second largest source for skilled professionals. The pandemic is seen to have exacerbated Sino-Australian relations and this further strengthens Australia’s relations with India is managing China.

European Union

The recent past has seen a reboot in the relations between India and EU which have both embarked on the journey of resuming the long stalled talks on a free trade deal with an aim to strengthen their economic cooperation in the face of an increasing Chinese assertion.

In 2013, trade talks suspended between the two nations but today it rises together to hedge strategically amidst the pandemic. The nations aim to double the trade by 2030 which shows the optimism it withholds for the future endeavours.

In a speech, Indian Foreign Minister Jaishankar highlighted how the pandemic has shown the necessity of diversifying supply chains, especially for the EU.  He says “Europe is looking at strategic autonomy, looking at a multipolar world, which is actually hedging its risk” (Jaishankar, 2021). This was told in the backdrop of repercussions faced by EU and more so, for the majority of the world for being overly dependent on China for trade. Glorifying on this aspect, India has an edge to build connections in the European world and sustain Chinese growth.

In addition to the trade boon, EU countries also signed the “Indo-Pacific Strategy” that aims to impose greater European influence in areas of Chinese superiority. Keeping this in hand, the two nations remain steadfast on building infrastructure across Europe, Asia and Africa in the name of “connectivity” partnership. It doesn’t brand it to be an “anti-Beijing” plotting, but a mere alternative to the Belt and Road Initiative of china, a way of disallowing Chinese investments.

Conclusion

Today it can be said that the world has come up together, galvanised in order to counter China in the changing world order. This pushback against China has been manifesting itself in multiple ways and in particular, by the regional players who have been successful in persuading more coordinated actions along the way so as to create a more stable balance of power in these highly tumultuous world that we live in.

The complex rivalry between India and China has led to hedging strategically by a mixed approach of cooperation, deterrence and balancing, which is seen to be working efficiently for India till now. After all, India’s ultimate aim is to build its own capabilities without overtly provoking China and silently transform itself to be a competition. To achieve this, India is building its relation with China’s neighbours such as South Korea, Taiwan, Japan, along with maintaining a cordial relationship with Russia and mending relations with Pakistan and ultimately gaining support from the western nations in strategic cooperation with a common aim.

It is evident today how China’s belligerent agenda on regional states has caused it a greater pushback with the unity of the rest of the world against it. The BRI is confronted with numerous fault lines, the Indo-Pacific is well-established, QUAD resurrected and various regional players are beginning to engage with each other much more cohesively.

The only concern that remains today is the growing influence China has over India’s neighbours through its ‘debt-trap diplomacy’ and its ‘aggressive wolf-warrior diplomacy’, for which India needs to make sure to make the neighbouring countries believe in the hidden agenda and bring unity with India in countering the spread and rise of China. India’s ‘vaccine-maitri’ initiative was a good way of handling the neighbourhood, but more needs to be done in this aspect.

The way forward is to accept each other’s legitimacy in certain aspects and hedge accordingly in others. Military escalation such as in 2020 Ladakh is to be prevented in order for both to maintain its relations. To paraphrase Deng Xiaoping (1988), “unless China and India are able to co-exist peacefully, “there will be no Asian century.”

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Why Nepal’s Maoist finance minister is talking about legalizing black money?

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Despite being the oldest sovereign nation in South Asia, Nepal is also the most unstable nation of the subcontinent. For example since Nepal’s republican era of 2006, Nepal has got 12 Prime Ministers in 15 years. Even during multiparty democracy and constitutional monarchy from 1990 to 2006, Nepal saw 15 Prime Ministers in 16 years. This tendency is reflected even in times of nondemocratic and transitional periods of past. If constant political history is an indication, Nepal is prone to repeated governmental build-ups and break-ups.

Nepal’s volatile governments naturally mean volatile plans and policies, which is reflected in the budgetary announcements. Interestingly, it is only Maoist and Maoist-background Finance Ministers in Nepal who have introduced budgetary provisions making provisions whitewashing black money.

Recently, Janardan Sharma, the Finance Minister representing CPN (Maoist Center) party of the coalition government led by Sher Bahadur Deuba, the President of Nepal’s oldest surviving party Nepali Congress, introduced a controversial provision for black money. On 10 September, while presenting his replacement bill to replace budget announced by erstwhile Government led by KP Sharma Oli, Finance Minister Sharma said investments in mega projects  such as international airports, tunnels, roadways and railways do not necessarily require to disclose their sources of revenues.

Such provision, main opposition CPN-UML leaders and majority of Nepal’s economic experts say, would whitewash all black money assembled by Nepal’s power elites and comprador capitalists.  Nepal’s largest-selling English daily The Kathmandu Post has termed it the ‘Thief’s Route’.  Post editorial has talked about its domestic and international implications. It has written, ”this move comes at a time when the Asia Pacific Group on Money Laundering (APG), a regional, inter-governmental, anti-money laundering body of which Nepal is also a member…. The ramification can be disastrous for Nepal.”

This budgetary provision of incumbent Maoist Finance Minister Sharma has gained critical uproar from all quarters. However, this gains vocal support from Dr. Baburam Bhattarai, the Maoist ideologue and former Vice-Chair of Maoist who defected Maoist in 2015 to form his party. During his tenure as Finance Minister when the Government was led by Maoist’s Chair Prachanda for the first time in Nepal in 2008, Bhattarai has also introduced similar provision. He had legalized illegal property of individuals by self-declaring the worth of their property. This specific program was called ‘Voluntary Disclosure of Income Source’ (VDIS).

Though not implemented owing to widespread ire, Dr. Bhattarai had introduced plans of hydropower investments with no mandatory provisions of revenue source disclosure. Supporting the provision of his former comrade, Dr. Bhattarai has said, ”It is nice to legalize black money. Here is the tendency to do illegal works by black money. Whether it is black or white, it is right to invest in productive and employment-generating sector.”

It was the 180-degree departure in Maoist principle coined by its ideologue Dr. Bhattarai himself.  Before launching 10-year-long Maoist violent armed insurgency in 1996 which resulted in killing of more than 17 thousands Nepali, Bhattarai had handed over 40-point demand to the then PM Sher Bahadur Deuba on 4 February. In 39th. point, Dr. Bhattarai had written, ”Corruption, smuggling, black marketing, bribery and the practices of middlemen and so on should be eliminated.”

This starting demand opposing black money and ongoing defense of the same in the name of ‘productive investment’ displays how Nepali Maoist comrades have deviated from their own principles. Another coincidence is that they are the coalition partner of the Government led by the same Prime Minister Deuba to whom they have put forth their 40-point demand before launching violent Maoist armed insurgency before coming into mainstream politics in 2006.

Why Maoist and Maoist-background leaders are vocal supporters of black money?

Revenue nondisclosure provision mainly comes in tenures of Maoist Finance Minister like Janardan Sharma and Baburam Bhattarai. Other political parties have not vocally supported such malicious programs in Nepal.

Many suspects Maoist have huge illegal money grabbed in times of their 10-year-long violent armed insurgency when they did loot banks in capital Kathmandu and other economic centers of Nepal. Maoist had levied their ‘revolutionary tax’ to all working people and business activities in their vast swatches of base area. Forced donations and extortion further increased their revenues.  Bartil Lintner, a famed Swedish journalist-turned-author, in his Oxford University-published book titled ‘China’s India War’described Nepali Maoists as ‘one of the wealthiest rebel movement in Asia.’

Maoists, even after their entry into mainstream politics after Comprehensive Peace Accord of 21 November 2006 and terrorist delisting by State Department of the US on 6 September 2012, have not disclosed their party transactions. Nor there is any extensive research about net worth accumulated by Maoist during their underground violent armed insurgency in Nepal.

This legislation, if implemented, will force Nepal to sleepwalk towards money laundering, black money funneling and possibly terrorist financing. If big chunk of black money is invested in big income-making and employment-generating productive sections, its long-term impacts would be skyrocketed. This results in opaque financial activities.

 As an aid-dependent and remittance-receiving country from almost all economic powers of the world, legalizing black money  does not bode well not just for Nepal but also for its immediate giant neighbors-India and China. Nepal does not deserve to be the South Asian heaven of black investment and terrorist financing in the name of mega infrastructural projects.

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Ecosystem Restoration: The Answer to Indonesia’s Dilemma

The pressure for the Indonesian government to actively take part in climate change mitigation has been escalated lately. Since 2016,...

Middle East10 hours ago

International Solidarity Day with the people of Palestine

Since 1948, the people of Palestine were suffering due to Israeli oppression and aggression. Despite several resolutions on Palestine passed...

New Social Compact12 hours ago

Partnering with persons with disabilities toward an inclusive, accessible and sustainable post-COVID-19 world

As the world observes the International Day of Persons with Disabilities today, we honour the leadership of persons with disabilities...

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South Asia14 hours ago

China’s rise in power and India’s rise in fear: Strategic hedging amidst growing threat

India, the nation long being under colonial oppression started its journey of foreign policy with the ideology of Pt. Jawaharlal...

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