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India & its extended neighbourhood

By C. Raja Mohan

CAN INDIA think big and bold about its extended neighbourhood? Can New Delhi overcome the debilitating politics of the subcontinent to grab at the big opportunities knocking at its door? Two exciting proposals for regional economic integration, both transcending the subcontinent, are likely to severely test strategic planners in New Delhi. One proposal, coming from the West, tantalises India with the potential of long-term strategic bonding with the Persian Gulf through natural gas pipelines. And the other from the East, called the Kunming Initiative, is named after the capital of Yunnan province in southwestern China. Yunnan wants to build regional economic cooperation among eastern India, southwestern China, Bangladesh and Myanmar.

Both proposals are grand in their conception. They are driven by the prospects of big economic spinoffs. They involve mega projects cutting across not just national boundaries but regional ones too. They imply a transformation of the geopolitics of India's neighbourhood. The first will integrate India with the Persian Gulf and beyond. The second will link India with China and South East Asia. Both the projects also allow India to revive economic linkages that have become dormant over the recent decades.

The two proposals are, in essence, about rediscovering India's extended neighbourhood, regaining its strategic leverages in the region, and reclaiming its historic role in the areas abutting the subcontinent. But coming in the way are India's traditional security concerns about its more immediate neighbours and apprehensions about the impact of trans- regional cooperation on the internal dynamics of the restive areas within India. Does India have the genius to balance the imperative of long-term strategic calculus with immediate tactical considerations on national security?

But first we must turn to the idea of extended neighbourhood itself. It is only in recent years that India has sought to reintegrate the neighbouring regions of Persian Gulf, Central Asia and South East Asia into its foreign policy vision. Although Jawaharlal Nehru talked about building an area of peace and cooperation in Asia, the Cold War and its impact on the region sharply limited India's ability to pursue the Nehruvian goal. The strategy of Non-Alignment did provide India with some political linkages in its neighbourhood. But they were largely shaped by the dynamics of the Cold War at the global level and did not translate into regional security benefits.

There was very little commercial underpinning to India's relations with its extended neighbourhood. Thanks to the policies of economic autarchy that Non-Alignment promoted, there was hardly any movement towards regional economic integration. South East Asia, with its regional framework of ASEAN, was an honourable exception, but politically it stood on the other side of the Cold War divide.

It was the collapse of the Soviet Union and the pressures for open-door economic policies that pushed India into thinking more seriously about economic opportunities to the East and West of its immediate neighbourhood. India's own expectations of rapid economic integration within the South Asian Association for Regional Cooperation (SAARC) did not materialise, thanks to Pakistan's reluctance to open its economic doors to India. With the future of SAARC now looking grim after the military coup in Pakistan, there is growing interest in India about both sub- regional cooperation and trans-regional integration beyond the subcontinent.

The former Prime Minister, Mr. P. V. Narasimha Rao, developed the so-called ``Look East'' policy. Mr. Inder Kumar Gujral took it further by talking about India's ``extended neighbourhood'' encompassing the Persian Gulf, Central Asia and South East Asia. The External Affairs Minister, Mr. Jaswant Singh, has emphasised the importance of engaging these regions more purposefully than before. With trade becoming an important element of national strategy, the extended neighbourhood had begun to register in India's strategic consciousness.

But how does India translate the slogan on the significance of the extended neighbourhood into concrete action? That is where the two new proposals on trans-regional cooperation come in. The first is about binding India and the Persian Gulf in a long-term energy relationship through a gas pipline. It came up when Mr. Jaswant Singh travelled to Iran last month. Iran has abundant reserves of natural gas and wants to export it to India, whose thirst for hydrocarbon resources is enormous. Other countries on the Arab side of the Gulf such as Qatar and Central Asian states such as Turkmenistan too have huge surpluses in natural gas. They would like to pump their natural gas into a pipeline to India, which has emerged as one of the top importers of petro-products in the world.

India is the nearest and biggest market for the natural gas surpluses in their extended neighbourhood. The countries of the Gulf as well as various international consortia are keen to build an overland pipeline to meet the natural gas demand in India. There is also commercial interest in India in such a proposal.

But there is one big catch. An overland pipeline will have to come through Pakistan. Islamabad after some initial reservations has now supported the project. But there are very strong reservations in New Delhi against a pipeline that passes through hostile territory. There is apprehension in New Delhi that such a project will allow Islamabad to control a major energy supply route into India and put at risk large downstream investments using the imported gas.

Many in India would prefer sticking to the current policy of importing natural gas in a liquefied form aboard ships, or a pipeline that runs along the sea-bed from the Gulf to India. Others argue that the overland option is the cheapest one, and it should not be impossible for India to insure against the risks of Pakistan's unreasonable behaviour.

Does the pipeline give Pakistan a hand on the energy tap to India? Or does it bind Islamabad into a framework of regional economic integration? A natural gas pipeline could be followed by possible road and rail links and develop into a commercial corridor between India and the Gulf, cutting across Pakistan. It could also become India's gateway into Central Asia via Iran. Those who make the latter case agree that Pakistan might indeed be tempted to turn off the tap, but they suggest Islamabad will find it impossible to displease Iran and the Arab states by interrupting their sales of natural gas to India.

A similar tension is tying down the Indian debate on the Kunming initiative that came into view when the President, Mr. K. R. Narayanan, travelled to China recently. Emboldened by their new prosperity and encouraged by Beijing, Yunnan's provincial authorities are thinking big about building commercial linkages with their neighbouring regions in South East Asia and the subcontinent.

Yunnan's cooperation is already intense with Myanmar and growing with the nations of Indo-China. It is proposing rail, road and air links among India's Northeast, southwestern China, Bangladesh and Myanmar to facilitate the movement of goods and people.

At the academic level, there is great excitement about the prospect of a land bridge to China and South East Asia through Bangladesh and Myanmar and the promise of bringing greater prosperity to India's Northeast. But Indian policy-makers have deep anxieties about getting into a sub-regional grouping with China and are concerned about the long-term consequences in the troubled Northeast. The conservatism of the security establishment is understandable. For too long, India has been on the backfoot in conducting its external relations. In dealing with the new proposals for economic integration with its extended neighbourhood, the time has come for New Delhi to begin batting on the frontfoot.

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