Bhutan
SOUTH ASIA MONITOR
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interest to the region
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India should be wary as China makes inroads in Bhutan
China, with deep pockets, is trying to woo Bhutan and wants to start a
diplomatic mission there, but India understands that these moves have strategic
implications and will weaken India’s influence, writes J K Verma for South Asia
Monitor
By J K Verma APR 11, 2019
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All of India’s neighbours, except
Bhutan, have joined Chinese President Xi Jinping’s dream Belt and Road
Initiative (BRI), even though China is constantly luring the Himalayan Kingdom
to become part of this ambitious plan. China’s vice foreign minister visited
Bhutan after the Doklam standoff in 2017 and, after narrating the advantages of
BRI, urged Bhutan to join it.
China and Bhutan share 470 km of unfenced,
contiguous borders but do not have official diplomatic relations. Both
countries have territorial disputes and have had about 25 meetings to resolve
their border issues. In 1959, after the Tibetan rebellion, about 6000 Tibetans
took refuge in Bhutan, enraging Beijing. The Chinese map of 1961 claimed
Bhutanese territories and there were regular intrusions by Chinese soldiers.
The four major areas of dispute between Bhutan and China include Doklam,
Gamochen to Batangla, Singhela and Amo Chhu.
The Bhutanese feel that China is an expansionist
country which wants to annex Bhutan; hence India and Bhutan signed the Treaty
of Perpetual Peace and Friendship in 1949, which was later replaced by a Treaty
of Friendship in 2007. In 1971, India sponsored Bhutan’s membership in the
United Nations. Analysts claim that Bhutan rejected China’s offer to relinquish
its claim on Jakarlung and Pasamlung areas in lieu of Doklam under Indian
pressure. Hydropower is another irritant: Bhutan exports 70 per cent power to
India, forming about 20 per cent of Bhutan’s gross domestic product (GDP).
Although bilateral trade between India and Bhutan
is $516 million, much more than with China, with which Bhutan’s trade is just
$10 million, Bhutan’s trade deficit with India is of $150 million. India
accounts for 90 per cent of Bhutan’s exports and 79 per cent of its imports.
India financed Bhutan’s hydropower sector, which generates 27 percent of its
revenue. India is Bhutan’s principal aid donor and its five-year economic plans
have been largely financed by India.
India assisted Bhutan during the Doklam military
crisis. The Border Roads Organisation has created a network of roads in Bhutan
under Project Dantak.
But the number of Chinese tourists in Bhutan is
swelling and they are now only second to Indian visitors. China is also
exporting cement, machinery, electrical appliances, toys and so on and has
emerged as the third biggest exporter to the tiny Himalayan nation. China has
also enhanced religious, cultural and sports ties and is also offering numerous
scholarships to Bhutanese students.
India should impress upon Bhutan that the BRI, a
key pillar of Chinese foreign policy, is a debt trap under which it builds
large infrastructure projects in smaller countries which have to give contracts
to Chinese firms at inflated rates. All men and material used in these projects
are Chinese and the countries have to take exploitative loans from China. When
these countries fail to repay their debt, the Chinese occupy these projects.
Sri Lanka lost Hambantota port, Malaysia cancelled several BRI projects, while
Maldives is analysing the feasibility of these projects and is likely to cancel
a few.
Islamabad, which is passing through a deep economic
crisis cannot annoy China, as it has promised about $60 billion in investments
in Pakistan. However, it appears that China intends to exploit the mineral
resources of Balochistan and arable land of Gilgit and Baltistan.
China, with deep pockets, is trying to woo Bhutan
and wants to start a diplomatic mission there, but India understands that these
moves have strategic implications and will weaken India’s influence. The Chumbi
Valley is an important tri-junction between India, China and Bhutan as it is
just 500 km from the Siliguri corridor which connects India with its
northeastern states.
Bhutan alleges that India created a fuel crisis in
2013, by slashing subsidies on kerosene and cooking gas when Bhutan was
strengthening its relations with China. Youth unemployment is touching 10.6
percent; hence it wants to develop economy at a faster pace. The foreign debt,
which was 108.6 percent of GDP in 2017, is increasing rapidly.
Several pro-Chinese elements in Bhutan criticise
Delhi and allege that India’s attitude is hegemonistic. Bhutanese businessmen
want Chinese investments so that the country can achieve faster economic
progress. The younger generation also alleges that India is exploiting Bhutan’s
hydropower and purchasing electricity at a low rate. They also want to chart an
independent foreign policy as they say India is undermining Bhutanese
sovereignty. Now Bhutan wants to settle its territorial disputes with China and
establish diplomatic relations with Beijing.
India should be careful as Chinese influence will
enhance manifold if diplomatic and economic ties are established between China
and Bhutan. Beijing, which considers Delhi as its strategic adversary, that seemingly
wants to encircle India, has already established close relations with India’s
neighbours and will try to win over Thimphu also. If Bhutan joins BRI and falls
into a debt trap, China will try to grab strategically important areas from
Bhutan, Hence India should be vigilant.
(The author is a New Delhi-based strategic analyst.
He can be contacted at jai_pushpa@hotmail.com)
SOUTH ASIA MONITOR
A Perspective on, from and of interest to the region
Powered by SPS Society for Policy Studies
India should seek to clear Bhutanese
doubts and apprehensions
China has a border dispute with
Bhutan but, because of India’s support, Beijing has not forced its hand. China,
which wants to thwart Indian influence in Bhutan, has offered to open a
diplomatic mission, an offer Bhutan has not permitted, writes J.K.Verma for
South Asia Monitor.
JAN 1, 2019
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China, the world’s second largest economy, considers India as
its strategic adversary. India challenged its might in 2017 during a 73
day-long standoff at the Doklam trijunction of India, China and Bhutan. Besides
Doklam, there have been several other irritants between the two Asian giants.
Both countries share a 3,488 km long mountainous frontier, which
is undemarcated at several places. China claims about 90,000 sq km in Arunachal
Pradesh and 10,000 sq km of Uttarakhand. Beijing has already captured Aksai
Chin and Pakistan has surrendered some portions of Jammu & Kashmir to it.
The Dalai Lama’s presence in India is also a bone of contention.
Other disputes include a water dispute, China blocking India’s
membership of the Nuclear Suppliers Group (NSG) and the China Pakistan Economic
Corridor (CPEC), which passes through Indian territory illegally occupied by
Pakistan. China has also blocked India’s efforts to have Jaish-e-Mohammed Chief
Masood Azhar declared a UN-designated global terrorist.
China is also averse to India’s special relationship with
Bhutan. The India-Bhutan Friendship Treaty of 2007 clearly mentions that
neither country will allow the use of its territory for activities which are
harmful to the security of the other country. Indian defence forces help defend
Bhutan, thus making Bhutan a protected country and Delhi has sway over Bhutan’s
defence and foreign policies. India is also Bhutan’s biggest foreign donor.
China has a border dispute with Bhutan but, because of India’s support, Beijing
has not forced its hand. China, which wants to thwart Indian influence in
Bhutan, has offered to open a diplomatic mission, an offer Bhutan has not
permitted.
China, which has deep pockets and a long-term strategy, has
strategically encircled India. It has grabbed Hambantota port from Sri Lanka
while China has constructed a signal intelligence unit in Coco Islands of
Myanmar. Pakistan, which is passing through a grave economic crisis, is
completely under China’s sway and has already lost Gwadar port. Nepalese Prime
Minister K P Sharma Oli is close to China and is taking the country away from
India. China has also constructed a military base in Djibouti.
In view of above, the three-day state visit of Bhutanese Prime
Minister Lotay Tshering to India was significant. It was Tshering’s first
foreign visit after taking over as Prime Minister.
India pledged a contribution of $ 643.5 million in Bhutan’s 12th
five year plan and also offered transitional trade support of US$ 57.3 million
to invigorate bilateral trade. Both Tshering and Indian Prime Minister Narendra
Modi agreed to enhance hydro-electric power generating capacity to 10,000 MW in
Bhutan. They discussed the current situation in Doklam as well as cooperation
in space science.
Modi, under his ‘neighbourhood first’ policy paid his first
foreign visit to Thimphu. Bhutan is also an important part of BIMSTEC (Bay of
Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation).
India should try to clear Bhutan’s apprehensions about BIMSTEC
and should assist the country to construct more hydel power projects. According
to an estimate, Bhutan has potential to produce 30,000 megawatt of electricity.
India has constructed three hydroelectric projects there, which are producing
1,416 MW of electricity, three-fourths of which is exported to India.
Tshering and his party Druk Nyamrup Tshogpa (DNT) are keen to
strengthen their relations with China. The visiting Prime Minister insisted
that Bhutan should be paid more for electricity generated through the
Mangdechhu project, the Sunkosh Reservoir project should start early and
India’s Goods and Services Tax (GST) should be reduced for Bhutan. India
is offering Rs.3.90 a unit while Bhutan seeks Rs.4.40 per unit. Tshering said
he wanted a fair price for electricity as it is the main source of revenue for
their 12th five year plan. Bhutan has not sought an increase in the aid amount
for the 12th five year plan; hence India’s budgetary support declined to 14 %
from 23 % in 11th five year plan.
India should grab the opportunity and should convert itself from
the biggest donor to principal development partner. Indian industrialists
should start industries in Bhutan as hydro power projects may generate money
but will not create jobs for young Bhutanese. India should try to reduce GST
rates as it is essential for a long-term relationship.
India should chalk out a long-term strategy to counter China,
not only in Bhutan but in other places too. At present China is much more
powerful than India; hence Delhi should ramp up its friendship with USA, Japan
and other like-minded countries. Indian policy makers should also try to
convince neighbouring countries that China is an expansionist power and it
gives loans with the ulterior motive of occupying their territory.
(The author is a New
Delhi-based strategic analyst. He can be contacted at jai_pushpa@hotmail.com)
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