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All eyes on Modi
All eyes on Modi

SRIDHAR K KHATRI

Prime Minister Narendra Modi of India is the proverbial man of the hour.  More than any other leader in South Asia, all eyes will be on him during the 18th Saarc Summit.  What he does, and most probably doesn’t do, could determine the fate of Saarc for years to come.  This is not a small burden on the shoulders of a man on the move who believes in making things happen without wasting much time.


The manner in which Modi decides to handle four issues will determine the shape of things to come. As India’s role in Saarc cannot operate in a vacuum, his approach toward the regional organisation will be influenced by how he chooses to shape and orient India’s evolving foreign policy, which has yet to find a firm footing in the region; take forward the complicated, but not intractable, relations with Pakistan; handle the growing pressure of Chinese influence in the region; and synergise Saarc’s potential, that has been held back so far.

 

India’s foreign policy
For the past decade and a half, India has been a nation on a roll, trying to adjust to a new environment based on its growing importance at the global stage. Its policy is still evolving, with degrees of variation towards different countries and regions. It is projecting its interest beyond the region (ie, ‘Look East’ policy, securing sea lanes, engaging with rising powers through the BRICS forum); courting major powers in ambiguous relationships that have not hurt its interest so far (ie, China and the United States); and investing in distant regions (Latin American and Africa) to secure raw materials and markets for its growing economy.

 

Like other regions, India’s neighbourhood policy is also still evolving. The main challenge to Modi will be to refine the broad strokes of India’s neighbourhood policy to one that will be perceived as mutually beneficial by its neighbours, both on a bilateral basis and at the regional level.


Unlike previous governments, the Bharatiya Janata Party (BJP) government led by Modi has strong momentum for implementing the designs of its foreign policy by reaching out immediately to neighbouring countries. First, by creating a positive environment by inviting the leaders of the region to his swearing in ceremony in New Delhi, and second, by visiting some regional countries to develop new partnerships in the subcontinent based on greater connectivity.  In contrast to the ‘shock and awe’ approach that India has often used towards her neighbours in the past, Modi has set out to ‘win the hearts and minds’ of those countries. During his visit to Nepal in August, he demonstrated very effectively that a big nation does not always need to rely on Machiavellian means to pursue a mutually beneficial relationship when all it takes is a big heart to win over neighbours.


Within Saarc, the main question is can Modi demonstrate that India can lead with humility as a pivotal power in the region without making others feel like second-rate actors in the arena? The two areas where his skills will be tested are in his dealings with Pakistan, another important member of Saarc, and China, a country with Observer status in Saarc, whose influence in South Asia has grown exponentially in recent years.

 

Pakistan conundrum
For nearly 70 years, India and Pakistan have co-existed in an adversarial relationship, with only sporadic periods of cooperation. From its very inception, Saarc has been caught in the on-and-off spiralling tensions between the two countries to the detriment of the region. It is, therefore, no coincidence that the prospect for Saarc seems brighter when India and Pakistan make an effort to improve their relations. Ironically, every time serious efforts are made to tackle difficult issues, spoilers on both sides of the border become active to throw a spanner into the works.


The long history of the India-Pakistan rivalry poses a particular challenge to the Modi government, since even if democratic leaders in Islamabad wish to improve relations with New Delhi, there are spoilers on both sides of the border who will do their utmost to derail the process. Within the last 15 years, there have been at least four instances when leaders from both countries made serious efforts to resolve their differences through back-channel negotiations, but spoilers proved more successful in the end. The last such reversal took place only a month or so after a heavy exchange of fire along the Line of Control (LOC), which set back the possibility of Pakistan implementing its decision to provide ‘most favoured nation’ treatment to India, which it had promised in 2011.


The 18th Saarc Summit in Kathmandu is being held at a time when the Modi government has deliberately chosen to postpone ground-laying talks between the foreign secretaries of the two countries. In his maiden speech at the United Nations at the end of September, Modi stated that he was prepared to engage in serious bilateral dialogue with Pakistan “without the shadow of terrorism”. As there has been no breakthrough yet, it will be a challenge for Modi to come up with anything concrete during the Summit in Kathmandu, aside from platitudes for greater integration in South Asia.

 

Chinese juggernaut
If the absence of a clear-cut policy towards Pakistan is holding back India from being proactive in the region, the expanding influence of China in Asia (not just South Asia) is pushing India to come up with more innovative approaches towards the region. China’s proposal for a ‘new Silk Road economic belt’ focuses on stronger economic relations (mostly trade) with Central Asia, while ‘the maritime Silk Road’ is designed to ameliorate relations with Southeast and South Asia with more emphasis on maritime trade security.  Analysts in India and the West see this as part of China’s ‘String of Pearls’ strategy designed to encircle India. China has also launched its Kunming Initiative to promote closer dialogue with South Asia (including Myanmar) in order to revive both land and maritime silk routes in the region. It acquired Observer status in Saarc in 2008 and has contributed to the Saarc Development Fund. More than any other country, China has been waiting in the wings and has not hesitated to show that it is keen to become more actively involved in the Saarc process.  


Sri Lankan economist Saman Kelegama has gone as far as to argue that India became active in Saarc only “after the bilateral economic ties between other South Asian countries and China started growing in importance.” India’s unilateral gesture in granting duty-free market access to the Indian market for all Saarc least developed countries (LDCs) in 2008, reducing the Indian negative list to 25 items under the South Asian Free Trade Area (Safta) in 2011, and donating $100 million to the ‘social window’ of the Saarc Development Fund in 2010 could have been spurred by China’s deeper engagement with the region.


When recalibrating Indian foreign policy with its largest trading partner, Modi will also need to factor in how to deal with the Asian juggernaut, both inside and outside the regional forum. A small litmus test for India at the 18th Summit will be seen in the position it takes on the role of Observers in Saarc, which is part of the Summit agenda. Will India continue to seek to exclude a more active role for external actors in the organisation’s activities, relying instead on its traditional approach to foreign policy? Or will India seek to engage competitively through Saarc in the spirit of ‘open regionalism’?

 

The pivotal power
As the pivotal power in the region, India’s role as a catalyst for change, growth, and closer integration will be crucial in determining the efficacy of the organisation. But much will depend on how India defines its role in the region. Everyone is waiting to see if there will be a paradigm shift in India’s approach to Saarc, from viewing it as a burden to that of a responsibility for the region. In the past, India has either played the role of a reluctant participant, eager to check the over-enthusiasm of its neighbours or has deliberately prevented Saarc from functioning in a normal manner. In recent years, it has modified its approach by pursuing a somewhat proactive policy with some restraints. Modi’s initial gesture to the region so far suggests that he wants to build on proactive aspects, with restraints conditioned only by serious security concerns.    


In part, any initiative Modi takes will build on some of the steps previous governments took in recent years. In addition to offering trade concession to LDCs in Saarc and contributing to the Saarc Development Fund (SDF), in 2012, the Reserve Bank of India offered a swap arrangement of $2 billion to Saarc member states in both foreign currency and Indian rupees, which aims to provide financial safety nets for South Asian economies that might have need for them in the future.


At the UN General Assembly in September, Modi went a step further and articulated the foundation of his neighbourhood policy. He mentioned that India places “the highest priority on advancing friendship and cooperation with her neighbours” since “a nation’s destiny is linked to its neighbourhood.” Even before going to New York, he had already indicated that India plans to focus on Saarc and had committed to set up a ‘Saarc satellite’ for the use of its member states, establish a Saarc Bank in the line of the BRICS Development Bank that India helped establish with four other nations, and work more closely to alleviate poverty in the region. These are no doubt important initiatives, but will it be enough to kick-start an organisation that has been in the doldrums for quite some time now?

 

What is to be done?
In order to ensure that such pledges become a reality in the future, there are four areas that leaders need to focus on during the 18th Summit.


First, there is a need for Saarc to review its decision-making process, which today operates in a manner that is quite different from the way it was envisioned by the Charter. Over the years, decision-making powers have devolved to the lower bodies by default since at summit meetings, top leaders have often shown symptoms of collective amnesia, with very little interest in following up on decisions taken at previous summits.  


Reports in the media that the 18th Summit will amend the Charter in order to hold summits after every two years, instead of annually, would be a step backward since it would sanctify the lead role of the bureaucracy, which, many would agree, hasn’t produced desired results. Overriding the recommendations of the Standing Committee and Council of Ministers at the first summit in Dhaka in 1985, regional leaders decided to hold summits annually, sending a clear message that Saarc would be a top leadership-led institution where other structures would serve as supporting mechanisms. The fact that the organisation will soon be holding only its 18th Summit in its 30-year history shows that this has not happened. This Summit needs to reemphasise that top leaders will be the ones providing a backbone to the regional body by working with stakeholders for the benefit of the peoples of the region.


Second, the leaders meeting in Kathmandu should consider seriously upgrading outdated Saarc institutions, whose structures and modalities of work were mostly established in the first 10 years of the organisation when Integrated Programmes of Action (IPA) in limited non-economic areas were considered its cornerstone. Since then, Saarc has moved into core areas of cooperation but is still relying on institutions that were never designed to cope with the wide scope of integration. In 1998, the Group of Eminent Persons (GEP) made recommendations to drastically overhaul the administrative structure of the organisation, but was prematurely set aside. The 16th Summit in Thimpu in 2010 created the South Asia Forum (SAF) and mandated it to develop a ‘vision statement’ and determine what kinds of administrative reforms were needed to improve Saarc’s functioning. The following year, then Secretary-General, Fathimath Dhiyana Saeed successfully rallied the member states to strengthen the administrative capacity of the organisation, which she found to be seriously wanting. Sadly, the SAF has not met in the last couple of years and is no closer in either developing a roadmap for Saarc nor in coming up with recommendations to strengthen its institutional capacity. Instead, the 18th Summit has an in-house report prepared by the Saarc Secretariat. The Summit will have to deliberate on the recommendations and decide if it is adequate and innovative enough to meet the present and future needs of the organisation.


Third, as is obvious from what has been said so far, Saarc needs to develop some monitoring mechanism to keep track of the commitments it has made, note the progress made, and ensure that pledges made to the peoples by each nation will reach completion. Summits can continue to add new programmes ad infinitum, but they will be of no consequence if the commitments do not see the light of day or linger on as unfulfilled agenda from one summit to the next. In order to ensure that commitments made by regional leaders are fulfilled, the 18th Summit may therefore wish to establish an advisory body to monitor the progress of programmes and activities endorsed at the summit level. As a way of complementing the Secretary-General’s annual report, the advisory body can report directly to the Council of Ministers on a biannual basis and submit its findings and recommendations prior to the summit to the heads of state and government.


Lastly, Saarc needs to put its money where its mouth has been for quite some time.  Over the years, member states have devoted a great deal of time deliberating and committing to the future of the organisation but spent only paltry sums (compared to the capacity of member states) on resources. Recognising the importance of developing infrastructure in the region, funding mechanisms were created by Saarc as far back in 1996, with the last avatar—the SDF—rechristened in 2008. It contains three windows—social, economic, and infrastructure—for funding projects. Saarc has so far approved programmes for nine projects under the social window with a total budget of $62,214,358, out of which $20,909,622.42 has been disbursed. No funds have so far been allocated under the economic and infrastructure windows, despite repeated calls at the summit-level to initiate projects at an early date.  


Sixty-two million dollars is a significant amount, but not so when it comes to doing business today, especially if one considers the cost of a single Boeing 737-800, or Airbus 320, aircraft to be around $93.3 million. When it comes to developing infrastructure, the requirements are much higher, running easily into billions of dollars. If Saarc is serious in generating resources to kick-start the SDF and the Saarc Development Bank, which Prime Minister Modi is keen to get going, the 18th Summit needs to decide: how much might be needed; how much can be generated from within the region; and whether additional amounts need to be secured from outside the region.


With all eyes set on the Indian prime minister, the pressure will be on him to come up with something tangible to resuscitate the ailing regional organisation by working together with his Saarc counterparts, who may have different agendas. What Henry Kissinger said in an interview at the Council on Foreign Relations in New York last week could equally apply to Modi’s predicament today: “A great statesman operates on the outer limit of what is possible.” Modi’s diplomatic skills in the art of the possible will soon be tested in the weeks to come.

Posted On: 26th November, 2014

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