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South Asia in 2011: a year of strained relations January 17, 2012

Posted by southasiamasala in : Gordon, Sandy, South Asia - General , trackback

Sandy Gordon

First published as  part of a special feature: 2011 in review and the year ahead, in East Asia Forum, 3 January 2012.

South Asia is a vast region encompassing eight nations (if we include Afghanistan) and over one-fifth of humanity. It is difficult to do it justice in this short summary of the year’s events.

Foremost among the region’s significant developments is the killing of Osama bin Laden in a US raid on 2 May. This is important not just for its effect on al-Qaeda, but because it made possible Washington’s claim that the US could now leave Afghanistan with its ‘mission accomplished’. By the end of 2014 there will be only a rump of about 20,000 NATO troops remaining.

At the same time, the raid also triggered a marked deterioration in the US-Pakistan relationship, already troubled by the Raymond Davis affair. The net result is that although the impetus on the US to leave Afghanistan has increased, the prospect of an orderly departure and satisfactory final outcome has declined.

The introduction of a ‘strategic’ element to the India-Afghanistan relationship during President Karzai’s New Delhi visit in early October and the NATO attack on a Pakistani border post in November — in which 24 Pakistani soldiers were killed — further diminished prospects for a peace based on compromise. Following the incident, Pakistan boycotted the vital Bonn conference on 5 December and closed the Pakistan-Afghan border to NATO supplies. Pakistan’s uncertain role was highlighted by President Zardari’s failure to return from Dubai in a timely manner following medical treatment.

In the worsening climate, Pakistan drew still closer to China. Islamabad not only assessed that the US relationship is a political millstone round its neck, but also that the US is a diminishing regional power — at the same time as China is rising.

On a brighter note, in early November Pakistan agreed to grant India most favoured nation status in trade, which India accorded Pakistan some years ago. Trade is still miniscule, and given cross-border tensions is unlikely to lift significantly in the near future. But the decision is symbolically important.

In India, growth slowed and inflation soared, exacerbated by a steadily falling rupee, such that by year’s end, there was a risk that India — which is heavily dependent on foreign capital to support its twin deficits — might become caught up in the investor caution now affecting Europe.

Politically too the Indian National Congress-led United Progressive Alliance has suffered from the widespread perception that it is even more corrupt than previous Indian governments. The massive 2G telecommunications scam was central to this perception. The corruption issue has paralysed the operations of Parliament at a time when urgent economic reforms are needed — for example, derailing efforts to introduce a 51 per cent FDI regime in retailing.

This highly negative climate for the government is background to the state-level elections in Uttar Pradesh, scheduled for 2012. These elections in India’s giant state are considered a bellwether for national elections in 2014.

India’s troubled relationship with China has not significantly improved over the year. Following New Delhi’s decision to allow the Dalai Lama to speak at a conference in the capital, China cancelled the 2011 border talks, scheduled for 28–29 November. Despite this, military-to-military relations are to resume, following India’s previous decision to cancel ties over the Kashmir visa issue.

Meanwhile, Nepal has bowed to Chinese pressure and is now allowing far fewer Tibetans to cross the border. The Maoists and their moderate opponents also failed to reach a compromise in the stalemate over the induction of an estimated 19,000 Maoist fighters into the army. Until Nepal overcomes this stalemate, it will continue to delay the long-awaited new constitution, instability will persist and the economy will languish.

Despite the fact that the normally pro-India Awami League is currently in power in Bangladesh, water continues to be a sensitive issue between Dhaka and New Delhi, primarily owing to the traditional row over sharing the Ganges’ water, but also because of Indian proposals to build a dam in Manipur. Bangladeshi irrigators are suspicious that the run-of-river hydro scheme will diminish their access to water, and the issue has become highly sensitive for the ruling party, often accused by the opposition of ‘selling out’ to India.

Against this troubled background in South Asia, Sri Lanka has had a relatively stable year. The Rajapaksa government continues to tighten its hold in the aftermath of the civil war, shrugging off international efforts to draw attention to alleged human rights abuses. They are assisted at home by the fact that Sri Lanka’s economic position is enviable, with an estimated growth rate this year of 8.5 per cent.

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