For smaller Countries In South Asia, intensifying India-China Competition In South Asia Is Becoming A Headache

For the four countries—Bangladesh, Maldives, Nepal and Sri Lanka—China is a new mammoth in the backyard

Nov. 13, 2019, 1:40 p.m. Published in Magazine Issue: VOL. 13 No. 07 ,Nov.08 –28 , 2019(Kartik.22, 2076) Online Register Number: DOI 584/074-75

Now that a full range of Indian reactions to president Xi’s visit to Nepal have come to the fore (Ashok Mehta and C. Raja Mohan in Indian Express and Shyam Saran on Rajya Sabha TV, among others), we have an opportunity to reflect on some of substantive elements of the relation away from the news-cycle fluff that came out circa October 12, 2019. The Indian reaction constitutes a range of opinions rather than a distilled position, at least at this stage. There are those who say India could have put more energy into economic integration with Nepal which would have narrowed China’s the space to create new economic inter-dependencies with Nepal. Others tend to point to China’s war chest of goodies that India could perhaps not match. Still others point to Kathmandu elites and communists in power trying to push Nepal closer to China in a cutting the nose off to spite the face mode. There is some truth to be found in all these points of view but the Indian foreign policy “elites” (in the spirit of reciprocation, if I may) are clearly missing a key point.

It is not only Nepal but all small countries in South Asia, excluding Bhutan and Afghanistan where India and the US, respectively, wield disproportionate influence, are deeply wary of being pressured to “balance” the interest of India and China in their own geopolitical calculations. For the four countries—Bangladesh, Maldives, Nepal and Sri Lanka—China is a new mammoth in the backyard. It stands out in size, posture and presence even if you are trying to avoid eye-contact. It is also a mammoth whose pathway to becoming a global power is crystal clear. It does not carry much of a history of relationship or baggage of mistrust with any of these countries. In that sense, it is a global power that has an unusual advantage of crafting its relationships in South Asia on a more or less blank slate. Whether China manages to handle this relationship wisely or not is a different story.

India on the other hand is meant to have history on its side. India is the fountainhead of civilization in South Asia; it has the kind of soft power resource that China will never have. There is enough depth and density in people-to-people relationships between Indians and their South Asian neighbours to ride out an occasional fervour of nationalism with ease. But India also has a history of misbehaviour in the region. No one really knows what was the point of doing what India did by supposedly coming to the rescue of its “diaspora” in Sri Lanka in the late 1980s or in Nepal in 2015. External meddling in an internal strife for minority rights or even political rights is the surest way to delegitimize the struggle; the eventual outcome of this misadventure in Sri Lanka as well as in Nepal is there for everyone to see in full glare. In Bangladesh, what kind of liberal democracy values was India trying to pursue by legitimizing an election that bore no feature of a free and fair election? If today a matter as international as Kashmir is being argued as an issue internal to India, on what grounds was India justifying these misadventures in the neighbourhood then? As they say in foreign policy, mistakes were made. But as they say in human psychology, people remember things.

China’s foreign policy paraphernalia in South Asia is clearly more resourced and sophisticated compared to that of India’s. India cannot beat China’s economic prowess, its foreign aid budget, the size of its soft-loan portfolio, and its finely calculated refrain from political meddling in other people’s countries. For smaller countries in South Asia, China is becoming a resource for growth and development that is difficult to ignore. But the real push comes from the lop-sided regional economics that India’s neighbours have had to live with for a long, long time. India has a disproportionate trade surplus with all its neighbours. Even by an older 2017 World Bank data, India’s trade surplus with Bangladesh, Sri Lanka, Nepal and Maldives is 15.6 Billion USD. Data from Pew Research Center shows that India’s net remittance receipts from three countries—Bangladesh, Nepal and Sri Lanka—is 14.2 Billion USD. Bhutan’s indebtedness to India at 107 percent of the GDP and concurrent trade deficits with India at approximately 10 percent of the GDP is literally driving that country’s economy to the wall. Apart from Bangladesh in the recent years, all countries mentioned here are struggling to pay their bills with their balance of payments uniformly heading in the negative territory. This is perhaps not an opportune time for India to advise its neighbours on how predatory economic relations with China can get.

India’s argument that enhanced bi-lateral relation, trade and connectivity with China is a “choice” for India’s neighbours to make and that choice has consequences for their bilateral relations with India is an absurd one. First, it is not a choice any longer, it is an economic necessity. Second, how come the same argument doesn’t apply to India? Despite being America’s closest geopolitical ally in the region why is India cosying up to Russia on S400 missiles, with Iran on oil, and China on 5G technology? I don’t see Americans going crazy over these choices India has made. If India desires a respectful, pragmatic relationship with global powers, what is the harm if little countries in South Asia want the same from India?

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Sagar Prasai

Prasai is a freelance consultant based in Kathmandu. He frequently writes on water and energy issue for regional and international outlets

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