June 24, 2017

Trump administration abruptly shutters diplomatic office on Pakistan and Afghanistan policy

https://www.washingtonpost.com/world/national-security/trump-administration-abruptly-shutters-diplomatic-office-on-pakistan-and-afghanistan-policy/2017/06/23/91f9654e-5843-11e7-b38e-35fd8e0c288f_story.html?utm_term=.0bb2c76fcfcf





Secretary of State Rex Tillerson at the White House on April 20. (Jabin Botsford/The Washington Post)

By Anne Gearan and Carol Morello June 23 at 5:33 PM

The Trump administration has moved to close the stand-alone State Department office devoted to policy on Afghanistan and Pakistan that was the brainchild of diplomat Richard C. Holbrooke, current and former State Department officials said.

The Special Representative for Afghanistan and Pakistan office will be absorbed into the larger State Department division responsible for South and Central Asia, the officials said. The decision was announced to some office staff Thursday evening and took effect Friday, according to the officials, some of whom spoke on the condition of anonymity to discuss a decision that had not yet been announced.

Friday was also the last day of work for the office’s current leader and her deputy.

The closure had been expected as part of Secretary of State Rex Tillerson’s planned downsizing and restructuring of the department, an effort that is also expected to result in the closure of other stand-alone offices or special envoys.

[White House frustration grows with Tillerson over jobs for Trump allies]

But the sudden timing and the lack of permanent, experienced diplomats in the top jobs overseeing policy for both countries leave the State Department without experienced hands for a region where the United States has been at war for 16 years, former employees said.

The State Department did not respond to a request for comment.

The decision to close the office comes as the administration is conducting a lengthy review of policy toward both Afghanistan and Pakistan, and as the Pentagon prepares to send thousandsof additional U.S. forces to the war in Afghanistan.

“Whether by design or mismanagement, it leaves the department with no institutional memory on Afghanistan-Pakistan at the very moment when we are on the cusp of surging militarily,” said Dan Feldman, a former director of the office under President Barack Obama. “It’s a recipe for deeper military involvement with no political strategy.”

But the SRAP office, as it was known, had shrunk to about a dozen employees — from nearly 100 at its height — before the end of the Obama administration. Its mission had narrowed, too, from the main diplomatic player overseeing strategy associated with Obama’s troop surge in Afghanistan and troubleshooting the difficult U.S. relationship with Pakistan to a group of specialists managing ongoing U.S. programs.

Some Obama administration officials and State Department rank and file had considered the office redundant and advocated closing it years ago.

Vikram Singh, who was a deputy of the office under Holbrooke, said it makes sense to fold the position into the South and Central Asia Affairs bureau now. But the timing, he said, betrays a lack of strategy and is symptomatic of a vacuum in critical positions throughout the State Department.

“I don’t think there’s only one way to run a war,” he said. “But you should have a game plan and staff it accordingly.”

Singh and others pointed to vacancies in the top positions at the South and Central Asia Bureau, among other open diplomatic jobs. Meanwhile, an expanded military plan for Afghanistan appears to be going forward separately.

“We’re adding troops, but we’re doing nothing to advance the diplomatic or political steps necessary to find a solution,” Singh said. “This is not just baffling. It’s the height of irresponsibility.”

The office was created during the first year of the Obama administration in 2009 as a perch for Holbrooke, a blustery and talented diplomat who was one of several special envoys named by Secretary of State Hillary Clinton.

Holbrooke had argued that the U.S. relationship with nuclear-armed Pakistan needed an overhaul and that the porous border with Afghanistan and the presence of U.S. forces there necessitated a cohesive strategy for both countries.

In her State Department memoir “Hard Choices,” Clinton wrote that the difficult portfolio “seemed in need of his outsized talents and personality.”

Holbrooke set about recruiting “the best minds he could find from inside and outside of government,” she wrote, including academics, development experts, diplomats and specialists from other federal agencies.

Holbrooke died suddenly in December 2010, after suffering a torn aorta during a meeting with Clinton in her State Department office.

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On Friday afternoon, the small suite of offices housing the special representative looked normal. Two young men sat at desks in the anteroom, a television set was turned to news and no moving boxes were in sight.

One of the men said the acting director, Laurel Miller, was unavailable to talk to a reporter. Miller did not return a phone call to her office later in the afternoon.

James L. Dobbins, a veteran diplomat who ran the SRAP office from 2013 to 2014, said the Obama administration had begun plans to shutter the office after the 2016 presidential election, when the incoming Trump administration indicated it planned to do away with the SRAP and other adjunct special envoys. That decision was later put on hold, but Dobbins said it was no surprise that the office would eventually close.

“It’s absolutely normal for any new administration to do away with ad hoc special arrangements the previous administration had, and then do their own,” said Dobbins, a senior analyst at Rand Corp.

He added, however, that “every administration says it wants to do away with special envoys and they end up having 30 of them by the time they’re through

Will roll out the red carpet for Modi’s US visit, says White House

http://www.thehindu.com/news/international/will-roll-out-the-red-carpet-for-modis-us-visit-says-white-house/article19139377.ece?homepage=true

Varghese K. George

WASHINGTON, JUNE 24, 2017 07:44 IST

UPDATED: JUNE 24, 2017 11:27 IST

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Prime Minister Narendra Modi

Trump and Narendra Modi to spend five hours together; new areas of anti-terrorism cooperation to be announced during the visit.

The White House will “roll out the red carpet” for Prime Minister Narendra Modi on Monday, a senior administration official said on Friday, making it clear that the Donald Trump administration will carry forward the agenda set by the previous Obama administration for U.S.-India relations.

Both leaders will spend nearly five hours on Monday, starting with a one-on-one meeting at 3.30 pm, followed by a delegation level meeting, a cocktail reception and a working dinner, the official said, briefing on background. Mr. Modi will be the first foreign dignitary to be hosted by Mr. Trump for a White House dinner, the official added. Mr. Trump hosted Chinese President Xi Jinping and Japanese Prime Minister Shinzo Abe for state dinners at his private golf resort Mar-a-Lago in Florida.

The President considers India a critical partner in dealing with a variety of global challenges, the official said, adding that defence partnership between the countries will flourish under the Trump administration. “We believe that a strong India is good for the U.S.,” said the official.

“President wants to build on that,” the official said, referring to the previous administration’s measures to promote defence cooperation with India. The Obama administration had designated India as a ‘major defence partner,’ an undefined term. The White House official said there will be some “concrete expression of that description,” during Prime Minister Modi’s visit to the U.S. capital. Mr. Modi will arrive on Saturday evening.

Accelerated defence cooperation

While defence cooperation will be accelerated and enhanced, cooperation in energy, particularly natural gas, will be a new thrust in bilateral ties under the Trump administration, the official said. New areas of anti-terrorism cooperation will be announced during the visit.

The official gave clear indication that the pending Indian request for 22 unarmed Guardian drones would be cleared during the visit, saying no comments could be made before the U.S. Congress is notified on any arms sales.

Meanwhile, the CEO of General Atomics Aeronautical Systems, manufacturers of the UAV, told Defense News that the sale has been cleared. “We are pleased that the U.S. government has cleared the way for the sale of the MQ-9B Guardian to the Indian Government,” said Linden Blue. “Guardian provides the endurance and capability required to significantly enhance India’s sovereign maritime domain awareness in the Indo-Pacific. General Atomics Aeronautical Systems is standing by to support the U.S. and Indian Governments throughout this process.”

Indian defence orders support thousands of jobs in the U.S. and the Indian student population supports another 64,000 jobs in the U.S. The White House official pointed out that Mr. Trump and Mr. Modi were two leaders with a large number of Twitter followers and both were innovative in their thinking.

Both leaders will read out a brief statement each after the one-on-one, but the they would not take questions from the media, a departure from usual White House practice after the President’s meeting with a foreign dignitary. Usually, both leaders take questions from the press.

The official indicated this was done at India’s behest. “Don’t read too much into it,” said the official, when reporters pressed why questions will not be allowed.

The official recalled that the President had expressed his admiration for the Indian American community during his campaign last year. “He had then said India would have a true friend in the White House if he wins,” the official said, referring to Mr. Trump’s speech at a gathering of Indian Americans organised by Shalabh Shalli Kumar, founder of the Republican Hindu Coalition (RHC).

‘Ties with India and Pakistan not a zero sum equation’

America’s ties with India and Pakistan are qualitatively different, and they are not a zero-sum equation, a senior White House official said. The official said America’s defence cooperation with India does not threaten Pakistan. 

“U.S. relationship with India and Pakistan really stand on their own merits. We don’t see a zero-sum relationship when it comes to U.S. relationship with Pakistan and U.S. relationship with India. We are certainly eager to deepen the strategic partnership with India but we are also interested in continuing our co-operation with Pakistan,” the official said.

According to the senior administration official, the Trump administration is concerned about tensions between India and Pakistan and “would like to see the normalisation of relations between the two countries.” At the same time, the official made it clear that it would not offer to mediate between the two. “…we very much encourage India and Pakistan to engage in direct dialogue,” the official said. 

“We seek to have an effective partnership with each country. We see India’s role and influence growing. We like to encourage that. With Pakistan too, we seek to work together but frankly the priorities are very different. The nature of the relationships are different. We would like to move forward in both cases but we understand that the pace and scope in both cases is going to be very different,” said the official

"H1 B visa non-issue at this point"

A discussion on H-1B visa is not likely when Prime Minister Narendra Modi and President Donald Trump meet on Monday. The White House official said a review of the visa programme is underway and nothing has changed materially yet. 

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“On the visa issue, there is no plan for it to come up specifically. But you know, if it’s raised.... the administration has signed some executive orders related to work visas and immigration which directs the Secretary of State, the Attorney General, the Secretary of Labour and Secretary of Homeland Security to propose potential reforms to the H-1B program. Right now, nothing has changed with respect to application or issuance procedures. We’re not in a position to pre-judge what the outcome of that review might be. There’s really been no changes at this point. There’s no changes that target any specific sector yet,” the official said. 

Though there has been much rhetoric about it, the Congress-mandated visa programme cannot be unilaterally amended by the executive. The review currently underway could make some changes that could be done through executive action, and recommend other changes to Congress. Any radical changes in the programme will have to be undertaken through a legislative process. The Trump administration has also indicated that the larger questions could be added on to the immigration reform debate, in which case, any change would be long drawn and difficult

In Narendra Modi, Donald Trump has a leader he can truly work with: Experts

http://m.economictimes.com/news/politics-and-nation/in-narendra-modi-donald-trump-has-a-leader-he-can-truly-work-with-experts/articleshow/59297538.cms


By PTI | Jun 24, 2017, 01.55 PM IST

" If approved, India will become the first non-NATO country permitted to purchase the high-tech drones."

NEW DELHI: Prime Minister Narendra Modi is a leader, US President Donald Trump can truly work with and the two should communicate in their first meeting the desire to advance bilateral relations while addressing concerns over H1B work visas, experts here have said. 

"The visit of Prime Minister Modi couldn't come at a more opportune time. President Trump badly needs both an opportunity to bolster his presidency and a clear achievement to add to his win column. In India, Trump has a natural partner, and in Modi, he has a leader he can truly work with," Asia Society Policy Institute Assistant Director Anubhav Gupta said on the eve of Modi's visit to the US for his first bilateral meeting with Trump. 

Gupta said Trump and Modi can begin on the right foot by communicating their desire to advance the relationship to new heights. However, the two should also ensure that "legitimate disagreements" on certain issues, including the H1-B work visas and intellectual property rights do not hold the relationship back. 

"There is strong bi-partisan support in the US Congress for a closer partnership with India. India's fast growing and increasingly more open economy are huge opportunities for the United States. Additionally, India can serve as a vital partner for the United States in the Asia-Pacific region. For all of these reasons, pursuing stronger ties with India would be a clear win for the Trump administration," Gupta said. 

He added that Modi, who has steadily moved India closer to the United States in his three years in office, is well positioned to take the relationship further after consolidating political power in India through big victories in recent state elections in India. 

With Modi "strongly situated" to win re-election in 2019, the US should take advantage of his good standing. 

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"The visit's success will depend on whether the Trump Administration has been able to focus enough of its attention on India to decide whether and how it will seek an upgrade in the relationship. It will also depend on whether the White House can reassure India about some of its major concerns," Gupta said. 

The Institute's Director of Asian Security Lindsey Ford said while Trump and Modi may have challenging waters to navigate on the economic front, especially regarding trade deficits and visa issues, a "bright spot" in their conversation is likely to be the security and defence relationship. 

"The most notable deliverable likely to emerge from the visit is the announcement of the US decision to sell India 22 unmanned Guardian drones, a request which had been at the top of Modi's wish list. If approved, India will become the first non-NATO country permitted to purchase the high-tech drones," Ford said. 

The drones deal, combined with Lockheed Martin's recent announcement of a new joint venture with Tata Advanced Systems, signifies the rapid growth of US-India defence ties over the past decade, Ford added. 

Gupta stressed that in his meeting wth Trump, Modi is sure to bring up South Asian stability, in particular US policy toward Afghanistan and Pakistan. 

"India will look for reassurance that the Administration is committed for the longer term in Afghanistan and has a true interest in and strategy for maintaining stability. Modi will also push the administration for a more stern US policy toward Pakistan, which continues to support militancy in Afghanistan and India. Support on these two fronts would reassure India greatly," Gupta said. 

The two leaders can commit to strengthening economic ties by agreeing to a genuine dialogue on enhancing trade or negotiating a bilateral investment treaty, Gupta said. 

Ford added that given the uncertainty surrounding the Trump administration's Asia policy, and in particular, US strategy in South Asia, Modi will also want to remind Trump of the significance of the US-India strategic partnership and of the US commitment to long-term stability in Afghanistan. 

Noting that India is the indispensable country for addressing climate change, Asia Society Policy Institute Director of Asian Sustainability Jackson Ewing said India embodies the core climate debate about how much emerging economies should rely on fossil fuels for their development needs. 

"India will aggressively transition away from fossil fuels only if doing so makes strategic and economic sense to the country's political and economic leadership," Ewing said. 

"Accelerating its transition to a cleaner energy future - as Modi makes clear at every opportunity - will require substantial international support. It remains to be seen if such support is in the offing," Ewing added

Israel And the End of the Two-state Solution

Courtesy of Nina A. J. G./Flickr. (CC BY-ND 2.0)

This article was originally published by the Australian Strategic Policy Institute (ASPI) on 10 June 2017.

Donald Trump entered the White House promising to be ‘the most pro-Israel president ever’. This hyperbolic bombast gratified what is certainly the most right-wing Israeli government ever, which is celebrating the 50th anniversary of Israel’s crushing victory over Arab armies in 1967, and half a century of occupation of the West Bank and Arab east Jerusalem it has no plans to end.

President Trump, the self-described dealmaker, keeps hinting and tweeting he is on course to do ‘the ultimate deal’ that has eluded his predecessors: never spelt out but assumed to mean an Arab-Israeli peace encompassing a deal for the Palestinians, who have sought in vain the state proffered tantalisingly by the Oslo accords of 1993-95.

This most erratic of US presidents, meeting Benjamin Netanyahu, Israel’s prime minister, in February, threw the international consensus on the Israeli-Palestinian conflict since Oslo to the winds, saying that the two-state solution, meant to offer security to Israel and justice to the Palestinians, may not be the way to resolve it. ‘I am looking at two-state and one-state [solutions], and I like the one that both parties like,’ Trump said, to nervous chortles from Netanyahu and general bemusement.

Trump may have got something right: that the extent to which Israel has colonised occupied Arab land with Jewish settlements has placed a Palestinian state beyond physical as well as political reach. Yet nearly all Israeli Jews and most Palestinians oppose a one-state alternative.

Jews see a demographic time-bomb, in which Arabs would eventually outnumber them in the cramped space between the River Jordan and the Mediterranean (the two peoples are now roughly level-pegging at about 6.3m each). Palestinians, fed up with their corrupt and feckless leadership, would only opt for one-state if they got the same rights as Israelis, including the vote. That isn’t going to happen. Remaining as second-class citizens, under occupation in a de facto single entity, holds little appeal.

The Trumpian blur of empirical impressionism—talk of ‘a much bigger deal’ that would ‘take in many countries’—is starting to come into focus, if not feasibility. After last month’s inaugural foreign trip, starting in Saudi Arabia and then Israel, his plan seems to be to get Sunni Arab states to join Israel in an alliance to isolate their shared enemy in Shia Iran, and in passing solve the century-old question of Palestine.

It’s hard to see this “grand bargain” as serious, much less getting very far.

It’s true that Arab leaders have long colluded and collaborated with Israel, despite ritual outpourings of brotherly solidarity with the Palestinians. But an Arab peace initiative, backed by the 22-member Arab League and all 57 states in the Organisation of Islamic Cooperation, has been on the table since 2002. It offers Israel peace treaties with full diplomatic relations in exchange for its withdrawal from all Arab land captured in 1967, and the creation of a sovereign Palestine on the West Bank and Gaza, with east Jerusalem as its capital. Israel has always refused to discuss it.

Things have moved on. The common threat to the rule of Arab autocrats posed by the turmoil of the so-called Arab Spring, which opened new opportunities for jihadi extremism after 2011, and a shared hostility towards an Iran that has hardened its Shia axis since the 2003 US-led invasion of Iraq, extending it through Syria to Lebanon, and branching down into the Gulf—all this has relegated the Palestine issue.

But Arab rulers do care above all about survival, and the mood of their peoples, for whom Palestine—and above all Jerusalem—are emotive issues. Mr Trump’s musings about a single state have encouraged annexationists in the Israeli cabinet such as Naftali Bennett, education minister and leader of the far right Jewish Home party. He’s pushing to foreclose decisively on any two-state option by annexing Ma’ale Adumim, a settlement east of the Holy City whose municipal boundaries exceed those of Tel Aviv, and expand its built-up area to put in place the last ramparts that enclose occupied east Jerusalem and encircle Bethlehem.

Saudi players such as Mohammed bin Salman, the young deputy crown prince in whom King Salman, his ailing father, has invested extraordinary power, will sound conciliatory. But the House of Saud ultimately must look to its legitimacy, and Jerusalem is a ticking bomb. Saudi rulers, who style themselves as the custodians of the holy places of Mecca and Medina, cannot ally openly with an Israel that refuses to share any part of Jerusalem, which contains the third holiest place in Islam—the al-Aqsa mosque in the Noble Sanctuary, on what Jews know as Temple Mount.

The larger point is that the domestic costs to Israel of uprooting its 50-year settler enterprise to make way for a Palestinian state far outweigh the benefits of satisfying the episodic strictures of an international community that isn’t willing to change this cost-benefit equation. Nathan Thrall, an International Crisis Group analyst who makes this case almost irrefutably in his recent book, says: ‘so far Israel has proven quite capable of living with the decades-old label of “pariah”’.

The growing opprobrium of subjugating a people, colonising their territory, and appropriating scarce resources such as water and arable land hasn’t impeded Israel from building a sophisticated and world-class economy. For Israel’s current extremist rulers, talk of a peace dividend is abstract in the extreme.

It’s important to remember that at the halcyon height of the Oslo peace process Israel got a peace dividend, without ending the occupation. Diplomatic recognition of Israel doubled in 1992-96, from 85 to 161 countries, leading to doubled exports and a six-fold increase in foreign investment, while per capita income in the occupied territories fell by 37 per cent and the number of settlers increased by 50 per cent.

President Trump, moreover, is trying to better Barack Obama, who was really ‘the most pro-Israel president ever’. His personal antipathy towards Netanyahu masked this, but Obama was the only US president since 1967 never to have allowed Israel to be condemned at the UN Security Council (last December, as a parting, shot, he abstained on a vote against West Bank settlement policy). Obama also signed the biggest military aid package the US has ever given Israel.

It’s hard to believe Trump can improve on this. But it beggars belief he’s the man who will change the calculus of an Israeli occupation well set to grind on pitilessly.

About the Author

David Gardner is international affairs editor at The Financial Times based in Beirut

Economic Sanctions: Sharpening a Vital Foreign Policy Tool

23 Jun 2017

By John Forrer for Atlantic Council

Why do economic sanctions remain a popular foreign policy tool even though analysts question their ability to create ‘sustained impacts’? According to Jack Forrer, such restrictions are scalable and easily explained; you can design and implement them quickly; and they often yield immediate and tangible results. But what’s really valuable about sanctions, Forrer concludes, is their potential dynamism and versatility, which are well suited for the fluidity of a globalized world.

This article was originally published by the Atlantic Council on 14 June 2017.

Under the leadership of Andrea Montanino, director of the Atlantic Council’s Global Business & Economics Program, and Ambassador Daniel Fried, distinguished fellow at the Atlantic Council and former coordinator for sanctions policy at the US State Department, the Economic Sanctions Initiative is building a platform for dialogue between the public and the private sector to investigate how to improve the design and implementation of economic sanctions. To forge a path toward more effective economic sanctions, the initiative has a focus that goes beyond a purely national security perspective on sanctions to bridge the gap with the broader business perspective.

The recent comments by US Secretary of State Rex Tillerson— “[W]e will continue to hold Russia accountable to its Minsk commitments. The United States sanctions will remain until Moscow reverses the actions that triggered our sanctions.”1— underscore the enduring significance of economic sanctions as a vital foreign policy tool. Whether faced with aggressive military actions by one country against another, interference by one country in another country’s elections, intolerable human rights violations, or the illegal testing of nuclear weapons, economic sanctions are among the first foreign policy options discussed as a response. The United States, for instance, has twenty-six active sanctions programs against other countries, entities, and people.2

Yet, despite economic sanctions’ popularity as a foreign policy tool, their ability to deliver sustained impacts on target countries has been contested. The issues that have been raised to question whether economic sanctions “really work” are even more relevant today: Did they inflict economic losses on the sanctioned country’s economy? Did those economic losses put political pressure on public officials? Did they compel the sanctioned country to change its policies? A rapidly transforming global economy puts markets, trade, and investments in a continual state of adjustment and change. That means assessments of countries’ vulnerability to economic sanctions must be updated regularly, taking into account their interconnectedness within the global economy as the economy changes over time.3 To be effective, it is critical that the design, implementation, and measurement of economic sanctions’ impacts be properly calibrated to the economic realities of the moment, not the past.

In the absence of a comprehensive and contemporary assessment of a target country’s vulnerability to economic sanctions, it is easy to see how their intended impacts and actual consequences could fall badly out of alignment. Poorly designed economic sanctions will have poor prospects of attaining the foreign policy goals they were intended to help achieve. They also amplify the unintended and residual suffering of people and organizations caused by economic sanctions. For instance, citizens with limited political influence in the sanctioned country will suffer economic losses; vulnerable populations may suffer from lack of access to vital imported products; and small business owners located outside the sanctioned country but reliant on its imports and exporters for their own markets may suffer losses. Giving greater attention to what can be learned about a country’s vulnerability to economic sanctions and their likely impact by considering these questions through a business perspective could make an important and significant contribution to keeping sanctions in better alignment.

Drawing on a business perspective when assessing a country’s vulnerability to economic sanctions and their likely unintended and residual effects can reveal important and more nuanced factors that go beyond formal econometric modeling or identifying laws affecting trade and investments. Understanding how business is practiced in a given country and how those practices could be adapted to mitigate the effects of economic sanctions would inform the sanctioning country on better designs, implementation, and measures of the economic sanctions’ true impacts. Using a business perspective would also draw more attention to anticipating how the exit strategy could be executed as sanctions are lifted, making it easier for businesses and investors to reengage business partners in the previously sanctioned country.

Working to ensure a close alignment for economic sanctions between their anticipated and actual impact could be advanced through a public-private partnership. Engaging business leaders to share information about what they have learned about doing business in a given country, the potential impacts of economic sanctions using risk assessment tools and expertise, and the more informal ways in which businesses and investors might adapt to, or evade, the consequences of economic sanctions would be an invaluable resource for sharpening this vital foreign policy tool.

A Vital Foreign Policy Tool

Economic sanctions remain a popular foreign policy tool for several reasons. First, they can be designed and implemented quickly. Second, the initial consequences are immediate and tangible. Third, the rationale justifying their use as a response to unwanted international actions is easy to explain. Fourth, economic sanctions can be calibrated to respond to a relatively small or large international incident. Finally, sanctions provide an invasive yet non-military foreign policy response.

In addition, and perhaps the most compelling reason for their appeal, sanctions can be designed and deployed to achieve many foreign policy goals.4 The most typical foreign policy goals addressed by economic sanctions include:

1. Compelling another country to change unwanted policies by inflicting a level of economic suffering for a sufficient duration of time to make retaining the offending policy, including regime change, intolerable. An example is the sanctions against South Africa to protest its policy of apartheid.

2. Deterring another country from adopting an unwanted policy in the future by inflicting a level of economic suffering for action(s) already taken commensurate with the grievousness of the action. The economic sanctions against Russia for the annexation of Crimea fall into this category.

3. Denying another country and others access to resources and financing that would be used to advance an unwanted policy or practice. A prominent example is the economic sanctions employed against Iran’s nuclear weapons development program.

4. Denying another country access to financial assets that could otherwise be used as reparations for actions of the sanctioned countries. The economic sanctions against Iran that froze Iranian assets housed in the United States is one example of this practice.

5. Making a symbolic gesture to diplomatically isolate the sanctioned country but with no expectations that the economic sanctions will impact the unwanted policies. The recent sanctions against Russia for its interference with the US electoral process is an example.

United States Secretary of State Rex Tillerson chairs a United Nations Security Council meeting on the denuclearization of the Democratic People’s Republic of Korea at the United Nations in New York City, April 2017. Photo credit: US Department of State/Flickr.

Of course, any given economic sanction may be adopted with the intent of achieving more than one of these goals—and groups may interpret the goal of the sanctions, and therefore their ultimate success, differently. For example, the Russian annexation of Crimea provoked the US and European Union to impose economic sanctions. Some may view the sanctions as symbolic and therefore successful by having demonstrated a protest; others may view them as purposeful with the goal of compelling Russia to withdraw from Crimea and would therefore view the sanctions to date as unsuccessful; and others might view the sanctions as a deterrent to future similar ventures, their success being difficult to assess.

Economic Sanctions ‘Out of Alignment’

It is surprising, given the strong enthusiasm for economic sanctions as a foreign policy tool, that their ultimate success is an unresolved topic of debate. Long-term economic sanctions imposed on South Africa in protest of its policy of apartheid are viewed as having been successful, while the decades-long sanctions imposed on Cuba are believed to have failed. Sanctions on North Korea have yet to bring about desired changes, but the sanctions on Iran appear to have been a significant catalyst for the recent agreement meant to prevent it from acquiring nuclear weapons capabilities. The success of sanctions against Myanmar and Russia is contested.

Compiled and designed by Ole Moehr, Assistant Director of the Atlantic Council’s Global Business & Economics Program

Economic sanctions’ greatest asset—their ability to be tailored to advance many foreign policy goals—helps explain, in part, why there exists both such widespread consensus on their usefulness and disagreement over their success. Any given sanction may be supported by different groups, each with its own perspective on what goal(s) is meant to be achieved. An economic sanction may be adopted without a genuine consensus over its goals: supporters agree some action should be taken, but disagree over the intended results. Thus, disputes about the success of any given economic sanction may be embedded in its authorization right from the start. These same disputes can also impede the timely lifting of sanctions. If the sanctioning country cannot adequately demonstrate that the sanctions’ goals have been achieved, ending sanctions is likely to be equated with a defeat for the sanctioning country. As a result, economic sanctions can linger and remain in place even when they no longer advance the sanctioning country’s interests.

In addition, economic sanctions can generate negative results for the sanctioning country: political backlash against the sanctioning country can thereby strengthen, not weaken, the power of the sanctioned country’s leaders; sanctions can prompt new alliances between the sanctioned country and adversaries of the sanctioning country; and sanctioned countries can impose counter-sanctions on the sanctioning country. Finally, economic sanctions can result in economic losses for the citizens and businesses of the sanctioning country and its allies through lost business relationships, trade, and investment.

Efforts to objectively assess the success of any given economic sanction and apply the lessons learned to designing future sanctions is a retrospective undertaking. Typically, such assessments occur many years after sanctions have been imposed and/or terminated. Only then can observations be made about the sanctioned country’s response, the sanctions’ full economic consequences, and the importance sanctions played among all the other factors influencing events and policies. But even the extensive research on the consequences of economic sanctions’ success has produced assessments that are mostly unsatisfying and problematic.5

A key asset of economic sanctions is how quickly they can be put in place. In the rush to design and adopt an economic sanction quickly, however, they can be designed poorly if information about a country’s vulnerabilities is not readily available, easily accessible, and recently updated. There will always be unanticipated consequences and a level of collateral damage that is unavoidable when economic sanctions are deployed. Efforts have been made to make economic sanctions smarter by targeting specific groups and individuals within sanctioned countries and those that live and operate transnationally. Yet there is plenty more to be done to ensure that the intentions and actual impacts of economic sanctions are properly aligned. One good place to focus is on how a globalizing economy is continually redefining countries’ vulnerability to economic sanctions, making it easier for countries to evade the intended consequences of economic sanctions, and making it more likely that the sanctioning country’s own people and firms—and those of its allies—will experience unnecessary losses and suffering.

As nations find themselves increasingly interwoven in an integrated global economy, discerning the success of economic sanctions ex post will become only more difficult. Sorting out what role sanctions played in foreign policy successes and failures and everything in between will be ever more challenging and difficult to discern. A re-emphasis on the importance of well-designed economic sanctions, which instill confidence ex ante that they will perform as intended, is the best way to ensure economic sanctions remain a vital foreign policy tool.

Russian Federation President Vladimir Putin (L), Federal Republic of Germany Chancellor Angela Merkel (C) and Ukrainian President Petro Poroshenko (R) meet in Minsk, Belarus to discuss the Ukrainian crisis and sanctions against the Russian Federation, February 2016. Photo credit: Karl-Ludwig Poggemann/Flickr.

The Global Economy and Economic Sanctions

The basic goal of economic sanctions has not wavered over time: to attempt to deny access to markets, trade, and financing to the sanctioned country so it causes sufficient economic losses to compel a change in policy. For example, the US colonies adopted nonimportation and nonexportation sanctions as a response to the Stamp Act of 1765 and created sufficient suffering from lost trade that English merchants pressured the British Parliament to repeal the offending tax. However, the realities of today’s global economy little resemble eighteenth-century international commerce and trade relations.6

The globalizing economy poses significant challenges to designing and deploying successful economic sanctions. Increased interconnectedness of countries and their economies through markets, regulations, voluntary standards, trade, commerce, and investments has created a complex, integrated global economic network. While some argue globalization is reversing,7 the scale, volume, and efficiency of international trade have all continued to increase since the 1970s. Today, trade volume has regained its pre-2008 crisis peak level, and the World Trade Organization predicts trade growth should accelerate 2.4 percent in 2017.8 It has become increasingly possible and profitable to trade across great distances and in parts of the world that previously had limited access to international transportation systems and distribution networks. In addition, the global economy has ushered in greater volatility of commodity prices, interdependence of nations for economic growth, integrated global supply chains that enwrap the earth, diminished government control over their domestic fiscal and monetary policies, and global corporations operating, partnering, and distributing products and services in markets across the globe.

Fluctuating Vulnerability to Economic Sanctions

Vulnerability to economic sanctions is defined as a country’s susceptibility to sustained economic losses resulting from an economic sanction.9 However, the economic activity disrupted in a sanctioned country does not accurately capture actual impact. Instead, it requires quantification of the economic activity that cannot be recaptured elsewhere at some future time by the sanctioned country. Therefore, countries that can recapture lost economic activity in less time and at lower cost are less vulnerable to economic sanctions. The actual economic losses are determined by the unique circumstances of any given country: its economic size, the types of goods or services it trades, global supply of and demand for its goods and services, elasticity of substitution effects, the structure of its economy, its propinquity to markets, its geographic attributes, and so forth.

It is also important to recognize that under any circumstances, a country’s vulnerability today may change in the future. Clearly, the recent rapid decline in world crude oil prices from about $100 to $50 per barrel over five months changed many countries’ vulnerability to economic sanctions dramatically. In a globalized economy, factors that affect a country’s vulnerability are more volatile and less predictable: commodity prices, recessions, technological breakthroughs, new products and services, interest rates, extreme weather, natural disasters, and public policies are among the factors that fuel a continual recalibration of a country’s vulnerability to sanctions. The consequences of economic sanctions at the time they are issued could be very different five years, one year, or even six months into the future.

More Opportunities to Evade Sanctions

Many sanctioned countries can make adjustments— such as changing trading, investment, and business partners—to avoid the sanctions’ effects or pass them along to others. For example, under the terms of the economic sanctions against Iran starting in 1979, the sanctions’ effects were mitigated by Iran’s expanding trade with other countries. For instance, exports from sanctioning countries were redirected to the United Arab Emirates, which in turn re-exported those same products to Iran. More generally, global products and commodities, banned as exports from the sanctioned country, can be redirected to a secondary country in need of that product, and the exports that were slated to end up in that secondary country can be redirected to the sanctioning country. The more commodified the product, the easier it is to reconfigure global trading networks. The global petroleum market is one good example of where this occurs.

In a globalized economy, sanctioned countries have many more opportunities to evade sanctions. More countries are importers and exporters of more goods and services. This creates more opportunities to expand or create new trading partnerships in response to economic sanctions—some openly and some through black markets. The number of global sources for investments and debt has expanded as well. They can provide financial support to offset the cost of economic sanctions, including through “dark pools” of global financing that exist outside the reach of domestic regulations or international policing.

Greater Likelihood of Unintended and Residual Damage

A country’s economy is the typical unit of analysis for assessing the effects of economic sanctions, but sanctions also affect cross-border commercial transactions conducted by citizens, businesses, and governments outside the sanctioned country. Sanctions are directed at the fortunes of the sanctioned country’s people, businesses, and state-owned enterprises, yet they can have profound effects beyond the economies of target countries. Firms that trade with or own, operate, and/or market their businesses in the sanctioned country but are located in the sanctioning country and its allies will suffer as well. Some of these losses can be projected, and well-designed economic sanctions would minimize these effects where possible.

But economic sanctions cause unintended and residual damage as well. Global commercial interconnections are a complex web of relationships and dependencies. Imposing economic sanctions has consequences beyond those intended in the sanctioned country and their known commercial partners. Over time, adaptations and accommodations are made, responding to economic sanctions that affect business activity well beyond the sanctioned country’s borders. A more robust accounting of potential unintended consequences is needed. Employing a business perspective is one way that could contribute to a more comprehensive assessment of economic sanctions’ potential impacts—both anticipated and unintended.

A Business Perspective on Effective Economic Sanctions

Designing economic sanctions to achieve a specific and sustained economic loss in another country will always be challenging. However, the characteristics of the complex global economy that present so many challenges to designing successful economic sanctions are nonetheless the same ones that offer opportunities to make them a powerful and effective foreign policy tool. The interconnectedness that creates options for evading economic sanctions can also make industries within a country highly dependent on business sectors in other countries. Business partnerships between global corporations and complex global supply chains can generate attractive business value, but they can also put firms at risk—particularly when few or no alternative products are available—when these economic relationships are disrupted.

Examining business relationships—within and across countries—and their interdependencies can reveal a nation’s vulnerabilities to economic sanctions. However, it is not the relative level of trade or investment that reveals vulnerabilities to economic sanctions; it is the sectors within which this economic activity takes place that will describe how many realistic options a sanctioned country has to evade sanctions. Using a business perspective provides a more disaggregated assessment of how to design economic sanctions to exploit a country’s vulnerabilities in a global economy and be more effective. It also helps identify other countries as strategic partners to join in coordinated multilateral sanctions. Recognizing that business relationships will differ between firms in a sanctioned country and firms in other countries allows for precisely designed sanctions—each sanctioning country addressing specific sectors—coordinated across a coalition of countries. Foreign policy considerations will determine which countries may participate in an economic sanction, but using a business perspective could help identify other countries whose participation would increase the effectiveness of the sanctions.

Drawing on a business perspective when designing economic sanctions would direct more attention to building in clean exit strategies from the outset. Of course, when sanctions are adopted, the focus is on blocking economic activity, not stimulating it. However, once the decision is made to revoke an economic sanction—whether it is months, years, or decades after its adoption—it is to the benefit of the sanctioned and the sanctioning countries to reestablish “business as usual” as soon as possible, particularly when the removal of sanctions has been negotiated, and the resulting economic benefits are a rationale used to support the policy changes that lead to an end to sanctions. Actions that will expedite reengaging business activity quickly post-sanctions should be identified and specified in advance as key components of any economic sanction.

Barriers to reestablishing business post-sanctions exist in both the sanctioned and sanctioning countries. While economic sanctions are in place, new business relationships and partnerships will be established to accommodate or evade the impact of sanctions by businesses in the sanctioned and sanctioning countries. Over time, markets and industries will evolve, new leadership will take positions in industry and government, new standards and products will be developed and others discarded, and government economic policies will change. Reengaging in postsanctioned countries is a resource-intensive effort in which success is not guaranteed.

Sanctions may be repealed in part or in whole. Firms wishing to do business in the post-sanctioned country need guidance to ensure business contacts and discussions conform with the new circumstances. Interpretations of the laws and the new rules of engagement need clarification. Timely and unambiguous rulings—formal and informal— by government officials are needed. A business perspective can help highlight and anticipate the potential areas of concern and issues that will arise post-sanctions that could impede swift reengagement.

Retooling Economic Sanctions

Economic sanctions can be an effective tool of foreign policy, but more attention must be given to the sophistication of their design commensurate with the complexity of the global economy they intend to influence. That means having an overall vision for what the optimal economic sanction should accomplish:

Economic sanctions should be designed to inflict a prescribed amount of economic loss, for a specified period of time, affecting specific constituencies at a level sufficient to achieve the identified foreign policy goal(s) with the least amount of unwanted harm on other constituencies;

and then designing each economic sanction to comport as close as possible with that standard.

Given the multiple aspirations for economic sanctions, there will be trade-offs and a balance needs to be struck. Sanctioning countries might tolerate more unwanted but unavoidable economic losses on other constituencies to support an important foreign policy objective. They would be less tolerant of such collateral damage in cases where sanctions are adopted as a symbolic gesture.

Striving to meet this standard for economic sanctions— and having a better idea in advance of the extent of their likely effectiveness—would strengthen support for their adoption. But meeting this standard would require several changes to the conventional approach to designing economic sanctions. First, it would necessitate high-quality and up-to-date information and modelling of a country’s greatest vulnerability to sanctions, including consideration of financial and business assessments, not only economic analyses. Second, it means sanctions need to be designed to be dynamic, not static; as the global economy changes, so should the sanctions, automatically modifying their targets and terms of restrictions to maintain the level of economic losses sought. Third, designing sanctions to follow the rhythms of the global economy may need to be more accommodating of businesses that also need to adjust to changed economic sanctions, allowing for and anticipating the time needed to make such adjustments. Fourth, consideration of the trade-offs of unilateral versus multilateral sanctions and the value of greater coordination and alignment of sanctions among multiple countries will be needed. Fifth, sanctions need to be designed to have their most comprehensive effects felt immediately, not incrementally. Finally, economic sanctions should anticipate an exit strategy so their termination can be done speedily, and include the terms for how businesses can begin to engage in a post-sanctioned country.

Conclusion

A better understanding of the potential efficacy of economic sanctions in any given situation is in everyone’s interest. Key to the success of economic sanctions is a design that results in the level of economic losses needed to accomplish the foreign policy goals of the sanctioning country with as little resulting collateral harm as possible. Poorly designed sanctions weaken the prospects for their success, cause unnecessary and unintended losses, and hinder efforts to reengage business in previously sanctioned countries. Ensuring economic sanctions are properly designed requires a sophisticated understanding of global economic markets, global supply chains, and global business.

With the election of Donald Trump, an opportunity presents itself to take a fresh look at ways to make economic sanctions more effective. Better designed economic sanctions that are more closely aligned with their foreign policy goals are one promising approach. But better designed economic sanctions would be even more successful when considered from both the policy and business perspectives. Building stronger public-private partnerships that can support efforts on behalf of well-designed economic sanctions can make important contributions to achieving this goal.

Economic sanctions are not a foreign policy option; they are a tool for accomplishing foreign policy. Like other tools, if they are blunt or misdirected, their prospects for success are limited and the risks of creating avoidable and/or unintended collateral damage are enhanced. Economic sanctions should be adopted and deployed when they are effective, and rejected when they are not: developing the analytics sophisticated enough to recognize the difference ex ante, not ex post, should be a top priority for those constituencies that affect, and are affected by, economic sanctions. Making economic sanctions a tool of foreign policy with sharper edges allows them to be used more precisely, purposefully, and successfully. 

Notes

1 Laura Smith-Spark, Elise Labott, and Zachary Cohen, “Tillerson: US to Maintain Ukraine-Related Sanctions on Russia until Crimea Is Returned,” CNN, March 31, 2017, http://www.cnn.com/2017/03/31/politics/rex-tillerson-russia-ukraine/.

2 “Sanctions Programs and Country Information,” US Department of the Treasury, https://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx.

3 Vulnerability to economic sanctions is defined as susceptibility to economic loss resulting from an economic sanction. Hossein Askari, John Forrer, Jiawen Yang, and Tarek Hachem, “Measuring Vulnerability to US Foreign Economic Sanctions,” Business Economics 40, no. 2 (2005): 41-55.

4 “While many economic sanctions target organizations and individuals, and much of the discussion is applicable to those instances, country-level sanctions are the focus of this brief.”

5 Johan Galtung, “On the Effects of International Economic Sanctions: With Examples from the Case of Rhodesia,” World Politics: A Quarterly Journal of International Relations 19, no. 3 (1967): 378-416; Gary Clyde Hufbauer, Jeffrey J. Schott, and Kimberly Ann Elliott, Economic Sanctions Reconsidered: History and Current Policy, Volume 1, Peterson Institute, 1990; Robert A. Pape, “Why Economic Sanctions Do Not Work,” International Security 22, no. 2 (1997): 90-136; Robert A. Pape, “Why Economic Sanctions Still Do Not Work,” International Security 23, No. 1 (1998): 66-77; David Cortright and George A. Lopez (eds.), The Sanctions Decade: Assessing UN Strategies in the 1990s, Vol. 1 (Boulder, CO: Lynne Rienner Publishers, 2000); Hossein G. Askari, John Forrer, Hildy Teegen, and Jiawen Yang, Case Studies of US Economic Sanctions: The Chinese, Cuban, and Iranian Experience (Westport, CT: Praeger Publishers, 2003).

6 Hossein G. Askari, John Forrer, Hildy Teegen, and Jiawen Yang, Economic Sanctions: Examining Their Philosophy and Efficacy (Westport, CT: Praeger Publishers, 2003).

7 Noah Smith, “Globalization Goes into Reverse,” Bloomberg, October 26, 2016, https://www.bloomberg.com/view/articles/ 2016-10-26/globalization-goes-into-reverse.

8 “Trade and Tariff Data,” World Trade Organization, https://www.wto.org/english/res_e/statis_e/statis_e.htm.

9 Askari, Forrer, Yang, and Hachem, “Measuring Vulnerability to US Foreign Economic Sanctions.”

About the Author

John Forrer is a nonresident senior fellow at the Atlantic Council’s Global Business & Economics Program. He is the director of the Institute for Corporate Responsibility (ICR), as well as research professor at the School of Business and associate faculty at the School of Public Policy and Public Administration at George Washington University.

Book Release "The Emergency" by Dr.Subramanyan Swamy

Dr Swamy concluding remarks at the Book Release on The Emergency at Gandhi Nagar, Gujarat

June 23, 2017

The Biggest Obstacles For China’s $900 Billion Silk Road

http://oilprice.com/Geopolitics/International/The-Biggest-Obstacles-For-Chinas-900-Billion-Silk-Road.html

The Biggest Obstacles For China’s $900 Billion Silk Road

By Global Risk Insights - Jun 22, 2017, 2:00 PM CDT

China’s grand vision of One Belt, One Road aims to facilitate connections between countries and peoples across Eurasia and boost investments and trade. The Chinese government must not neglect domestic challenges that could undermine its efforts.

The Silk Road Economic Belt and the 21st-Century New Maritime Silk Road, known as One Belt, One Road, is a foreign policy proposed by the Chinese President Xi Jinping to build roads, ports, and railways to connect Eurasia. The initiative spans overland and across the oceans, involving 60 countries along the two routes, covering 4.4 billion people and accounts for over 40 percent of the world’s GDP. The initiative is the most ambitious foreign policy that any contemporary Chinese leader has ever introduced, framed on the basis of mutual benefits and facilitates connectivity of policy, trade, financial, infrastructure, and people-to-people between the countries involved.

Both domestic and foreign Chinese observers have devoted a lot of efforts to figure out what this one belt, one road means and what it does. Many have outlined the external political risks that affect the implementation of the one belt, one road. But domestic risks and challenges that could undermine the one belt, one road also deserve equal examination.

Sustain support of one belt, one road from basing on national pride to basing on material gain

Naturally, the one belt, one road has enjoyed a huge popular support from the Chinese population. This is not only owing to the fact that President Xi himself enjoys a significantly high level of popular support, but also because the one belt, one road links to the historical trade route, Silk Road, which represented the golden period of China’s Tang dynasty and was responsible for over 50 percent of the world’s output then. It also links to China’s rejuvenation and the Chinese dream that Xi has been saying about.

However, this policy is more than just a strategy for China to leverage its economic might to increase its influence beyond Asia, this initiative is also part of China’s domestic reforms and economic growth. China will need to turn the popular support of the one belt, one road that based on national pride to the one that its citizens can see the material benefits of supporting the initiative in order to sustain the level of enthusiasm.

Last year, the state lender China Development Bank granted loans totaled to $160 billion to countries involved in the one belt, one road. Xi has also announced China’s commitment to spend $900bn to fund the initiative that involves building ports and railways in Africa and Asia. However, most of these countries are low-income economies and thus making a profit return is a slow process. Chinese people will question and in fact, are asking who is paying for the bill and if China is subsidizing development projects in those countries, why isn’t the government doing so in China. The high economic boom of China in the late 80s to early 2000s has created a huge inequality, and many provinces are still living below the poverty line. Social unrest and protests of the inner China have become more frequent and their dissatisfaction will be exacerbated if Chinese people do not see themselves benefiting or even losing out on these foreign projects.

Policy incoherence, internal resource struggle, and ethnic tensions marred implementation of the one belt, one road

Given the size of the Chinese territories, the country borders with a majority of the countries along the one belt, one road. The proximity with other countries give some Chinese provinces the ethnic ties, culture advantages, which mean they could serve an important role in the grand initiative.Related: Can Canadian Crude Compete In Asia?

Xinjiang, for example, is the core area of the Silk Road Economic Belt, which shares a border with eight countries including Mongolia, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Afghanistan, Pakistan and India. It is the window to west and deepens cooperation with Central, South and West Asian countries. Yunnan borders with Vietnam, Laos and Myanmar, serves the gateway to Southeast Asia. Fujian province, where many of the overseas Chinese in South-east Asian are originated from, is a core area of the 21st-Century Maritime Silk Road, which goes through several Southeast Asian countries through waters.

While the Chinese central government is expecting its different regions to use its comparative advantages to support the one belt, one road, this strategic deployment is constrained by the capacity of local governments.

Local governments lack sufficient understanding of the one belt, one road, especially those countries along the one belt, one road. The one belt, one road is a top-down policy, and local governments are often mobilizing their efforts to understand the central government’s intention, not the essence of a policy.

Another constraint is internal resources struggle among different regions. The concern of missing out has led to competition for resource between different provinces. Regions are often not aware of the events and discussions happening in their neighboring regions, and when they do, they often think this has nothing to do with them. Gansu, Qinghai, and Xinjiang, for example, share the border and with their geographic and cultural advantages are tasked to focus on cooperation with Central Asia and Western Asia, but there has been little synergy between these provincial governments. Xenophobic and conservative is very severe in many parts of China and the central government needs to push for better regional integration and coordination mechanisms for the grand strategy to bear fruits.

Final constraint is the ethnic tensions within China, such as Xinjiang and Tibet. Both regions have demanded more autonomy and tensions with the central government have led to violent outbreaks against civilians and properties. Separatist movements driven by ethnic conflicts fuse terrorist activities within China as well as in nearby countries along the routes of the one belt, one road.

Related: Aramco Aims To Take Over The Offshore Rig Market

Not all go-global companies are made equal

Many of the Chinese companies that are taking their business abroad branded themselves as part of the one belt, one road, in order to receive support and preferential access from the Chinese government, but whether they are actually contributing to the one belt, one road initiative is questionable. With increasing number of Chinese enterprises expanding their activities in countries along the trade routes, some they are doing more harm to China’s image than promoting the one belt, one road. While it is encouraging to see the high level of support from Chinese companies, for whatever reason, the unfortunate truth is that not all leading domestic Chinese companies are able to serve the one belt, one road as they are constrained by traditions, culture, and language barriers. Corruption, damage to the local environment, and cultural and political insensitiveness are all the potential risks that would undermine China’s efforts to push out the grand vision that pledges to be implemented based on mutual respects and mutual cooperation.

Final thoughts

Last week 29 head of states, along with other 1500 delegates from over 130 countries gathered in Beijing for a two-day conference, “The Belt and Road Forum for International Cooperation”, to discuss the one belt, one road initiative. The global event ended with 270 signed deliverables for policy coordination, infrastructure, trade, investment, and people to people exchanges. China’s grand vision to deepen connectivity and expand trades continues to receive a mixture of response. However, one thing for sure is that many countries and companies want to be part of the conversation, whether they support, suspect or have unanswered questions. China will not only need to be sensitive to how the international community react, but also how its domestic factors influence the implementation and the success of this grand initiative.

By Global Risk Insights

Why ‘Gorkhaland’ Will Be Economically Viable


Swarajyamag

Jaideep Mazumdar

- Jun 23, 2017, 4:29 pm

 

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SNAPSHOT

In contrast to the narrative of ‘Gorkhaland’ being a burden on the union government, separating the hills may actually not just boost the economy of the region but also India’s security by becoming a front-line state against Chinese aggression in the region.

One of the arguments against the formation of Gorkhaland—a separate state comprising the Darjeeling hills and the Dooars area of North Bengal—as is being demanded by the Gorkhas (Nepali-speaking citizens of India), is that the proposed state would be wholly dependent on the union government for all its needs. But this narrative, being espoused by Bengalis who want Bengal to retain its tenuous and unethical hold over the Darjeeling Hills and Dooars (D and D), is totally false.

Fact is, the proposed Gorkhaland state comprising the Darjeeling hills and large parts of the Dooars (which was part of the Kamata kingdom under the Koch dynasty before being captured by Bhutan and then by the British through the Treaty of Sinchula in 1865 after the Anglo-Bhutan War) can be a revenue-surplus state unlike the debt-laden West Bengal. The proposed state has tremendous potential in emerging as a high earner among all the states of the country.

Darjeeling and Dooars are richly endowed by nature. And the three ‘Ts’—tea, tourism and timber—are the money-spinners of this region. The region also has a lot of untapped potential to generate hydel power. Since the proposed Gorkhaland state will have borders with China (through Sikkim), Bangladesh, Bhutan and Nepal, cross-border trade will also bring in a lot of revenue. The region, being one of the prime 25 biodiversity hotspots in the world and with its wealth of flora and fauna, will also be able to earn a lot from eco-tourism.

Apart from the issues of a separate identity for the Gorkhas (Nepali-speaking citizens of India) and that the region and its people have nothing in common (linguistically, culturally and emotionally) with the rest of Bengal, the criminal neglect of D and D by successive governments in Bengal over the past 70 years has fuelled the demand for Gorkhaland. Not only is physical infrastructure in a mess in the region, little has been invested in healthcare, education, sanitation, livelihood projects, developing tourism, agriculture, floriculture and horticulture and even the showpiece toy train—the Darjeeling Himalayan Railway (DHR) that was accorded UNESCO World Heritage tag in 1999—that is the pride of the hills wallows in utter neglect.

Tourism

The D and D region gets around 5 lakh domestic tourists and around 50,000 foreign tourists every year. Unfortunately, due to poor infrastructure, most of these are low-budget tourists who do not contribute much to the local economy. Almost all the budget hotels in the region are operated on lease by Bengalis from the rest of the state and the locals are only employed as lowly-paid waiters and cooks. “So the locals are only marginal stakeholders in the multi-crore tourism sector,” said Sunil Pradhan, a tour operator.

D and D was once a high-end tourist destination that would attract high-spending international and domestic tourists. “The high-spending tourist stays in expensive hotels either run by locals or those who employ locals in management positions, hires local vehicles, spends a lot of meals, buys many mementoes and thus contributes a lot to the local economy,” Pradhan explained.

In stark contrast, the budget tourists who flock to D and D from the rest of Bengal and other parts of the country, as well as the backpackers from abroad, stay in budget hotels run by Bengalis, spend little on food and sight-seeing and nothing much on shopping. So the locals don’t benefit from the budget tourists.

Locals believe it was a sinister ploy to convert D and D, especially Darjeeling (Dooars became a tourist destination only recently), into a destination for the budget traveller. “It was done to satisfy the travel urges of the lower middle class and middle class Bengalis who were the supporters of the Left (which ruled the state for 34 years) and now the Trinamool. Making Darjeeling a low-end travel destination was a deliberate ploy to appease the overwhelming majority of Bengalis of Bengal who are low-budget tourists,” said Binita Rai, a senior executive with a star-category heritage hotel in Darjeeling.

Successive Bengal governments did not invest in tourism infrastructure or develop new tourist spots in the hills. “Many amenities aimed at the high-end tourists could have been developed, like golf courses, adventure sports and tea tourism. But while Darjeeling’s infrastructure was allowed to rot away, hotels catering to the backpackers and low-end tourists were encouraged to come up,”said Rai.

Under the proposed Gorkhaland state, says Sikkim Central University’s founding vice-chancellor Mahendra P Lama, Darjeeling can once again be transformed into a high-end tourist destination. “A lot of things can be done to attract the high-end tourists,” he said. A seminal study carried out by Lama says that the proposed Gorkhaland state can generate at least Rs 500 crore a year from tourism. “D and D region generates about Rs 40 crore as revenue from tourism every year for Bengal, but little of that money goes to the local people. With Gorkhaland, the earnings from this sector will not only increase, it is the people of the hills and the Dooars who will benefit,” said Lama, who used to teach at Jawaharlal Nehru Univeristy’s school of international studies and specialises in development economics.

Tea

Darjeeling contributes only 0.9 per cent to India’s total annual tea production of 1200 million kilos. But the 11 million kilos of Darjeeling tea is premium quality and is globally acknowledged as the ‘champagne of tea’. The average price of Darjeeling tea is Rs 500 a kilo, but the better quality Darjeeling tea commands astronomical prices through private sales, touching even Rs 2 lakh a kilo. Though the Darjeeling Tea Association (DTA) does not release any figures officially about the total sales proceeds from Darjeeling tea, industry insiders estimate that Darjeeling tea fetches about Rs 1500 crores annually.

Since all the tea gardens in the hills are owned by companies with their headquarters in Kolkata, all the revenue from this tea goes to the coffers of the Bengal government. The local people of the hills are employed only as poorly-paid labourers and supervisors in the tea gardens and thus have only marginal stakes in the trade. Not a single garden is owned by a Gorkha, and just a handful of them are in managerial ranks in the gardens.

“All the profits from Darjeeling tea are taken away to Kolkata. So of what benefit has been Darjeeling tea to the people of Darjeeling? In a Gorkhaland state, the revenue from the tea will accrue to the hills and the hills will prosper.

One of the primary reasons for Bengal’s opposition to Gorkhaland is that it will lose out on this revenue and will slide further into poverty. But Bengal has never looked on the people of the hills and the Dooars as equals and Bengal has never spent even a fraction of what it earns from Darjeeling tea on the hills,” said Professor Lama.

A Gorkhaland state, he adds, will pay special attention to rejuvenating the tea estates and improving the marketing of Darjeeling tea in international markets so as to improve its quality and the price it fetches. Darjeeling tea, estimates Lama, can easily earn Rs 1800 crore a year and with the revenues going to Gorkhaland, the state can easily become a financially self-sufficient one.

Timber & forest produce

Though timber trade is now restricted, the Bengal government’s forest department earns an estimated Rs 100 crore a year from sale of timber from its teak and sal plantations in the D and D region. “With proper marketing and streamlining the auction process to plug existing leakages, the earnings from timber can go up to Rs 200 crore a year,” said Lama.

The region is also home to a wide variety of medicinal plants, but no effort has been made to conduct even a semblance of research on this. “If research and development facilities are set up and medicinal plants are harvested properly, the D and D region can earn a lot through patents and manufacture of medicines. The pristine air and water quality of this region makes it eminently suitable for setting up of non-polluting pharmaceutical industries (as in Sikkim),” said Professor Lama.

Another area that has been neglected all these decades is the traditional medicinal and knowledge systems. The traditional folk medicines and knowledge systems of the Jhankris, the PhedangmasDhamisBonbosPowsNejums and Bumthings (all sub-tribes of folk doctors belonging to the Gorkhas, Bhutias, Lepchas and other communities of the region) have never been documented and promoted. “This is also an area that can generate a lot of revenue and can become a USP of the Gorkhaland state,”said Lama.

Hydel power

Asia’s first hydro-power plant came up at Sidrapong near Darjeeling town in 1897. Though the region has tremendous potential to generate hydel power through small dams, no effort has ever been made by the Bengal governments to harness this potential. It is a cruel irony that despite having such potential, the Darjeeling Hills and Dooars suffer from debilitating power cuts all year round.

According to studies by experts, mini and micro hydel plants that do not disturb the ecology of the region can generate thousands of megawatts of power. If properly harnessed, the Teesta, Mechi, Rangeet, Balasun, Relli and Sankosh rivers that flow through the region can generate up to 7500 MW of power. That can not only fully meet the needs of the needs of the region, the surplus can also be fed to the national grid to earn an estimated Rs 100 crore a month for Gorkhaland.

Flora and fauna

The D and D region is blessed with a fascinating variety of flora and fauna, starting right from the Himalayan herbs and shrubs in the upper reaches to the sub-tropical variety in the foothills. It has the Singalila, Mahananda, Jaldapara, Gorumara and Neora Valley national parks, the region also has the Buxa Tiger Reserve, the Senchal Wildlife Sanctuary and many other reserve forests. “Unfortunately, the flora and fauna of this region has never been promoted properly. With good promotion and development of proper infrastructure under a Gorkhaland state, all these national parks and wildlife reserves can attract thousands of wildlife lovers and researchers from across the globe. And a lot of revenue can be generated from this,” said Professor Lama.

Though it is difficult to put a figure to it, conservative estimates say that of these wildlife sanctuaries and forests are promoted properly after putting in place non-invasive and eco-friendly infrastructure, about Rs 400 crore can be generated every year from tourists and researchers. That would be a substantial revenue earning for a small state like Gorkhaland.

Border trade and other activities

The D and D region that would make up the Gorkhaland state will have borders with Bangladesh, Nepal, Bhutan and Tibet (through Sikkim). International trade can then generate a lot of revenue. “All these decades, the Bengal government has shown no interest in developing border trade. It’s focus has always been south Bengal. This will not change and no matter what the rulers of Bengal proclaim, they will never pay attention to the D and D region. So trade through the international borders can develop only under a Gorkhaland state,” said Daniel Lepcha, a Mumbai-based economist who hails from the region. Lepcha quotes a study by a local trade body to contend that border trade can go up to the volume of Rs 1000 crore a year. At present, the volumes are negligible.

Gorkhaland will also benefit by being a gateway to North East India and to Southeast and East Asia. Professor Lama says it would be included in the North Eastern Council (NEC) and, apart from getting more attention and funds for development, Gorkhaland would also emerge as a prime investment destination since it would be a tax-free state like Sikkim. Gorkhaland will, as Lama says, complete the definition of North East India.

The Darjeeling hills also have a number of premier educational institutions like the 194-year-old St Paul's School, the 129-year-old St Joseph's School (North Point) and the 110-year-old Goethals Memorial School, apart from many others. These schools used to attract students from United Kingdom, Europe and Singapore till not very long ago. “Their standards have been allowed to decline by apathetic Bengal governments and periodic unrest in the hills. Under Gorkhaland, these schools can be revived once again and new-age schools, colleges, management and higher technical institutes can be set up to turn this region into the education hub it once was. The climate of the hills, the positive and cheerful disposition of the local people, and the rich biodiversity of this region can make it a prime research hub as well,” said prominent educationist S K Rai.

Moreover, a Gorkhaland state boosts India’s security by becoming a front-line state against Chinese aggression in the region. “Gorkhaland can emerge as a front-ranking state of India and will, right from the very start, be an economically self-sustaining state unlike West Bengal. There is little prospect for West Bengal to improve its finances and become self-reliant in terms of revenue. Bengal is keeping the D and D region backward and dragging it from realising its true potential. Successive rulers of Bengal have perfected the art of internally colonising the D and D region and the present ruler, Mamata Banerjee, has gone a few steps forward by implementing a divide-and-rule policy. The alienation of the D and D region from the rest of Bengal is complete and the divide is complete and irreparable. Gorkhaland is a must now,” said Gorkha Janmukti Morcha leader Roshan Giri. The Morcha has been spearheading the Gorkhaland movement

Bill tabled in US House to revoke Pakistan's ally status


By PTI | Updated: Jun 23, 2017, 02.03 PM IST

Last August, the then Secretary of Defence, Ash Carter, withheld USD 300 million in military reimbursements because he could not certify that Pakistan was taking adequate action against the Haqqani network.

WASHINGTON: A bipartisan bill seeking to revoke Pakistan's status as major non-NATO ally (MNNA) to the US has been introduced in the House of Representatives by two top lawmakers, saying the country failed to effectively fight terrorism

Introduced by Republican Congressman Ted Poe and Democratic lawmaker Rick Nolan, the legislation calls for revoking MNNA status of Pakistan, which was granted to it in 2004 by the then president, George Bush, in an effort to get the country to help the US fight al-Qaeda and the Taliban

"Pakistan must be held accountable for the American blood on its hands," said Poe, who is a member of the Foreign Affairs Committee and serves as chairman of the Subcommittee on Terrorism, Non-proliferation and Trade. 

"For years, Pakistan has acted as a Benedict Arnold ally of the United States. From harbouring Osama bin laden to backing the Taliban, Pakistan has stubbornly refused to go after, in any meaningful way, terrorists that actively seek to harm opposing ideologies," he said. 

'Benedict Arnold' is a byword in the US for treason or betrayal. Benedict Arnold was a general during the American Revolutionary War who originally fought for the American Continental Army but defected to the British Army. 

"We must make a clean break with Pakistan, but at the very least, we should stop providing them the eligibility to obtain our own sophisticated weaponry in an expedited process granting them a privileged status reserved for our closest allies," Poe said. 

Under MNNA, a country is eligible for priority delivery of defence materials, an expedited arms sale process and a US loan guarantee programme, which backs up loans issued by private banks to finance arms exports. 

It can also stockpile US military hardware, participate in defence research and development programmes and be sold more sophisticated weaponry. 

Last August, the then Secretary of Defence,Ash Carter, withheld USD 300 million in military reimbursements because he could not certify that Pakistan was taking adequate action against the Haqqani network, as required by the National Defence Authorisation Act (NDAA). 

"Time and time again, Pakistan has taken advantage of America's goodwill and demonstrated that they are no friend and ally of the United States," Nolan said. 

"The fact is, the billions of dollars we have sent to Pakistan over the last 15 years has done nothing to effectively fight terrorism and make us safer. It is time to wake up to the fact that Pakistan has ties to the same terrorist organisations which they claim to be fighting," he said. 

The legislation will protect American taxpayer dollars and make the US and the world safer, Nolan said.