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Challenges for Indian foreign policy

A new “iron curtain” is threatening to descend on Europe. Unlike the one foretold by Winston Churchill 63 years ago on March 5 in his famous Fulton speech, this is not about ideological schism. It is an economic “iron curtain” that threatens to separate the larger economies of Old Europe from the poorer states of New Europe. That is, if the incipient currents of protectionism gather momentum and the single market in Europe gets swept away.

Already, the European Union summit in Brussels last Sunday decided that there would no EU bailout for the struggling economies of Eastern Europe. This further accentuates the fault lines within the 27-member EU between the “haves” of Western Europe and the “have-nots” of Eastern Europe.

Yet, the spectre of protectionism and its political fallout is only illustrative of the acuteness of changes in the international system that India must grapple with even as the world economic crisis relentlessly unfolds. The enormity of the challenge cannot but be stressed. The end of the UPA rule coincides with a transformational phase in the world order. Most important, the United States’ regional policies are showing signs of change that hold serious implications for India.

The landmark visit of U.S. Secretary of State Hillary Clinton to China last month attracted worldwide attention. As she wrote in a Foreign Affairs article last year, “our relationship with China will be the most important bilateral relationship in the world in this century.” Shorn of rhetoric, the reality is that the U.S.’ room for manoeuvre in its foreign policy towards China is shrinking. It is virtually opting out of any confrontational approach and instead seeking to fast-forward its cooperation with China. The main thrust of Ms Clinton’s visit was on seeking fresh Chinese loans for the deeply-indebted American government.

The interdependence between the two countries has reached a level that, arguably, China has little choice but to keep investing more money in the U.S. China holds nearly $700 billion in U.S. Treasury securities. Thus it came as no surprise when China banking regulatory commission director-general Luo Ping admitted: “Except for U.S. Treasuries, what can you hold? Gold? You don’t hold Japanese government bonds or U.K. bonds. U.S. Treasuries are the safe haven. For everyone, including China, it is the only option.”

China has a stake in the health of the dollar as its savings as well as its nearly $2 trillion worth of foreign currency reserves are mostly American. A comprehensive Sino-American global partnership resembling the U.S.’ relations with Europe or Japan was inconceivable earlier but it has now become a probability. The former U.S. National Security Advisor, Zbigniew Brzezinski, who is an influential voice, has called for a U.S-China “strategic dialogue” on India-Pakistan tensions, Arab-Israeli conflict and the situation around Iran.

From our perspective, the change in the U.S. policy is the equivalent of a tectonic shift. Our strategic gurus were whistling in the dark when they dreamt up India’s future as a “balancer” in the Asian power dynamic. The UPA government’s willingness to be drawn into a “quadrilateral alliance” against China, it now seems, was an embarrassing goof-up, unprecedented in its naivety. In fact, China and the U.S. resumed their dialogue on defence issues on February 27-28 following Ms Clinton’s visit. The official China Daily quoted a U.S. military official as saying the dialogue would focus on the “expansion of bilateral military cooperation and joint implementation of measures to address security concerns across the world, especially in East Asia.”

Significantly, Ms Clinton appeared to place limits on the U.S. support for Tibet. She said efforts to put pressure on China over issues such as Tibet (or Taiwan) “can’t interfere with the global economic crisis, the global climate change crisis and the security crisis.” The noisy activists in our country who fancied they held a “Tibetan card” must be shell-shocked.

Another template of the U.S. policy shift that creates debris is in relation to India’s relations with Iran. India’s traditional ties with Iran, which we regarded as a factor of regional stability, withered under the UPA watch. This happened due to the UPA government succumbing to U.S. pressure tactics. It was crystal clear to anyone even remotely familiar with the painful history of U.S-Iran confrontation that the Bush administration’s “containment” strategy aimed at bringing about a regime change in Tehran was getting nowhere and Washington would inevitably feel the need to review its policy. But the UPA government remained myopic.

Now, in a break with the past, the Barack Obama administration has decided to have “sustained” engagement with Iran. In sum, Washington admits that Tehran’s influence as a regional power cannot be overlooked anymore. An oil-rich country, the hub of Shia awakening and empowerment, a bulwark against the al-Qaeda, and an influential player in Iraq and Afghanistan — in all these respects, Iran becomes a serious interlocutor for the U.S. As an Iranian analyst put it, Tehran can “help resolve regional issues” provided the Obama administration “admits Iran’s significant role based on mutual respect and shared opportunities and interests.”

The irony is that the “cause” for which the UPA government succumbed to U.S. pressure — the India-U.S. nuclear deal — now lies in Mr. Obama’s freezer while he ponders what to do with it and where it fits in his disarmament agenda. Meanwhile, an enormous damage has been caused to India’s geopolitical interests due to the dilution of mutual understanding with Iran. This becomes galling when we come to developments in Afghanistan.

Iran was India’s close ally in countering the Taliban. But the UPA government disengaged from other regional powers with which it had shared interests and opted for the harmonisation of policies with the U.S. on Afghanistan. Whereas today, the U.S. seeks a regional solution to the Afghan problem, extracting a mediatory role in India-Pakistan relations. In other words, India must now somehow ward off the U.S. embrace. The time has come to introspect: What has the UPA government achieved by holding 50-odd military exercises with the U.S. in recent years? It has been very obvious that Pakistan is destined to become the U.S.’ preferred partner in Afghanistan, no matter what the Bush administration officials whispered in our ears about our pre-eminence in the Indian Ocean region.

Iran is initiating ties with Europe as an energy supplier. It is painful to watch that under U.S. pressure, India sacrificed its energy security interests by abandoning the Iran gas pipeline project, and in the changed climate now, the western countries stand to gain by our sacrifice. There is nothing more appalling in diplomacy than being used as a doormat. The UPA government owes us some explanation.

Yet another template of the Obama administration’s new thinking that affects India is its intention to “reset the button” in U.S-Russia relations. The U.S. has been forced to shelve the idea of NATO membership for Ukraine and Georgia. Equally, the Obama administration has hinted at a willingness to reconsider deployment of the missile defence system components in Central Europe. Also, Washington is probing an understanding with Moscow over the Iran nuclear issue even as Russia has completed the construction of the Bushehr nuclear power plant and is switching to start-up operations, apart from planning to sign a nuclear fuel supply contract with Iran for a term of “at least 10 years.”

A “northern corridor” with Russia’s help is critical for supplying NATO troops in Afghanistan. Thus, the U.S.’ “selective engagement” policy towards Russia has proved unsustainable. The Foreign Minister-level meeting in Geneva this week may kick-start a comprehensive U.S-Russia dialogue. Simply put, Russia is re-emerging as a major player on the world scene and that cannot but arouse India’s curiosity. Indian strategists underestimated the capacity of the Russian genius to regenerate, but a whole lot of new possibilities open up for India nonetheless.

Existing matrixes of regional cooperation such as the Shanghai Cooperation Organisation, BRIC and the Russia-China-India trilateral format assume an altogether new import. We need to think with clarity about utilising these matrixes creatively so as to augment the strategic space available to India for adjusting to the highly volatile world situation. The collapse of the Bush administration’s “Great Central Asia” strategy provides a backdrop against which India should reassess its approach to that region.

Finally, Russia’s challenge to the U.S. monopoly of conflict resolution in Afghanistan vitally affects Indian interests. Russia and India have identical concerns regarding the imperatives of regional security and stability. They have a common cause in ensuring that the forces of religious extremism and terrorists do not stage a comeback in Kabul. They should join hands in “Afghanisation” of the struggle against terrorists.

All in all, therefore, a seminal period of course correction lies ahead. Putting an “iron curtain” on the past and reconstructing the present is never an easy enterprise.

(The writer is a former ambassador and Indian Foreign Service officer.)

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