War and the Market Economy

Lester B Stone

• Publisher: Alpha Editions
• Year: 2017
• ISBN:
  9789386834416
• Edition: 1
• Topic: Política y relaciones internacionales
• Subtopic: Política

War has influenced economic history profoundly across time and space. Winners of wars have shaped economic institutions and trade patterns. Wars have influenced technological developments. Above all, recurring war has drained wealth, disrupted markets, and depressed economic growth. The role of war in the world economy is complex, yet pervasive. The shadow of war lies across economic history, influencing its pace and direction, and war continues to both shape economic developments and respond to them. The market economy involves peaceful cooperation. The division of labor cannot function effectively amidst a war. Warfare among primitive tribes did not suffer this drawback because the warring parties had not been engaged in trade before the hostilities. Thus they engaged in total war. Modern wars are won with matériel. Capitalist countries defeat their socialist rivals because private entrepreneurs are more efficient in churning out products, whether consumer goods during peacetime or weapons for their governments. Even so, ultimately war and the market economy are incompatible, as the market relies on peaceful cooperation. This concise and legible book will provide key text to all students, teachers and researchers.

India and Its Neighbours

India and Its Neighbours

Renewed Threats and New Directions

Dr. S K Shah

Alpha Editions

Copyright © 2017

ISBN : 9789386367501

Design and Setting By

Alpha Editions

email - [email protected]

All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher.

The views and characters expressed in the book are of the author and his/her imagination and do not represent the views of the Publisher.

Contents

Preface

1. Bilateral, Neighbours and Regional Relations of India

2. Threat Perceptions in India, Pakistan and China

3. India-China Relations and the Re-construction of Strategic Partnerships

4. India and SAARC: Relations and Policy

5. India and Pakistan : Relations, Conflict and Border Problems

6. The Sino-Indian War and Threats

7. Changing Paradigms in India-Nepal Relations

Bibliography

Index

Preface

The changing scenarios in the India's neighbourhood and in the global order over the past decade have made India to take a close look at her national interests. The bipolar world has given way to a non-polar world in which several new powers have emerged. India has to formulate policy options about her foreign and security policies.

Indian analysts, who talk of the Indian sub-continent, wish to keep in mind, in their analyses, the common historical, political, religious and cultural heritage of these three countries. The term sub-continent is used less and less in Pakistan and Bangladesh. The political leadership and the policy-makers in these two countries do not wish to be reminded of this common heritage. Any highlighting of this common heritage by Indian analysts is viewed by them with suspicion—— as indicating a hidden desire to reverse history and undo the 1947 partition.

India's foreign policy has always regarded the concept of neighbourhood as one of widening concentric circles, around a central axis of historical and cultural commonalities. The guiding principles of India's Foreign Policy have been founded on Panchsheel, pragmatism and pursuit of national interest.

Narendra Modi took the oath of office as India's 14th prime minister. Among his first decisions as head of government - in fact, it was set in motion even before the formal start of his tenure - was an unconventional act of diplomacy: inviting eight foreign leaders of neighbouring countries to attend his inauguration. All the matter is just compiled and edited in nature. Taken from the various sources which are in public domain.

This book contains the fundamental and basic information of the subject.

—Editor

1

Bilateral, Neighbours and Regional Relations of India

Neighbours

Bangladesh

Both states are part of the Indian subcontinent and have had a long common cultural, economic and political history. India played a crucial part in Bangladesh’s independence from Pakistan. In recent years India provides co-operation and assistance during annual natural calamities. India is largest exporter to Bangladesh. Most of differences are of sharing water resources between the two countries, such as the Ganges, where Bangladesh accuses India of diverting Ganges water to Calcutta through Farakka Barrage.

Bhutan

Historically,there have been close ties with India. Both countries signed a Friendship treaty in 1949, where India would assist Bhutan in foreign relations. On 8 February 2007, the Indo-Bhutan Friendship Treaty was substantially revised under the Bhutanese King, Jigme Khesar Namgyel Wangchuck. Whereas in the Treaty of 1949 “The Government of India undertakes to exercise no interference in the internal administration of Bhutan. On its part the Government of Bhutan agrees to be guided by the advice of the Government of India in regard to its external relations.” In the revised treaty it now reads as, “In keeping with the abiding ties of close friendship and cooperation between Bhutan and India, the Government of the Kingdom of Bhutan and the Government of the Republic of India shall cooperate closely with each other on issues relating to their national interests. Neither government shall allow the use of its territory for activities harmful to the national security and interest of the other.”

The revised treaty also includes in it the preamble “Reaffirming their respect for each other’s independence, sovereignty and territorial integrity”, an element that was absent in the earlier version. The Indo-Bhutan Friendship Treaty of 2007 strengthens Bhutan’s status as an independent and sovereign nation.

Tata Power is building a hydro-electric dam. This dam will greatly develop the Bhutanese economy by providing employment, and by selling electricity to India and fulfilling India’s burgeoning energy needs. Due to this dam Bhutan’s economy grew 20%, the second highest growth rate in the world.

China

Despite lingering suspicions remaining from the 1962 Sino-Indian War and continuing boundary disputes over Aksai Chin and Arunachal Pradesh, Sino-Indian relations have improved gradually since 1988. Both countries have sought to reduce tensions along the frontier, expand trade and cultural ties, and normalize relations.

A series of high-level visits between the two nations have helped improve relations. In December 1996, PRC President Jiang Zemin visited India during a tour of South Asia. While in New Delhi, he signed with the Indian Prime Minister a series of confidence-building measures for the disputed borders. Sino-Indian relations suffered a brief setback in May 1998 when the Indian Defence minister justified the country’s nuclear tests by citing potential threats from the PRC.

However, in June 1999, during the Kargil crisis, then-External Affairs Minister Jaswant Singh visited Beijing and stated that India did not consider China a threat. By 2001, relations between India and the PRC were on the mend, and the two sides handled the move from Tibet to India of the 17th Karmapa in January 2000 with delicacy and tact. In 2003, India formally recognized Tibet as a part of China, and China recognized Sikkim as a formal part of India in 2004. Since 2004, the economic rise of both China and India has also helped forge closer relations between the two. Sino-Indian trade reached US$36 billion in 2007, making China the single largest trading partner of India. The increasing economic reliance between India and China has also bought the two nations closer politically, with both India and China eager to resolve their boundary dispute.

They have also collaborated on several issues ranging from WTO’s Doha round in 2008 to regional free trade agreement. Similar to Indo-US nuclear deal, India and China have also agreed to cooperate in the field of civilian nuclear energy.

However, China’s economic interests have clashed with those of India. Both the countries are the largest Asian investors in Africa and have competed for control over its large natural resources. India and China agreed to take bilateral trade up to US$100 billion on a recent visit by Wen Jiabao to India.

Afghanistan

Bilateral relations between India and Afghanistan have been traditionally strong and friendly. While India was the only South Asian country to recognize the Soviet-backed Democratic Republic of Afghanistan in the 1980s, its relations were diminished during the Afghan civil wars and the rule of the Islamist Taliban in the 1990s. India aided the overthrow of the Taliban and became the largest regional provider of humanitarian and reconstruction aid.

The new democratically-elected Afghan government strengthened its ties with India in wake of persisting tensions and problems with Pakistan, which was suspected of continuing to shelter and support the Taliban.

India pursues a policy of close cooperation to bolster its standing as a regional power and contain its rival Pakistan, which it maintains is supporting Islamic militants in Kashmir and other parts of India. India is the largest regional investor in Afghanistan, having committed more than US$2.2 billion for reconstruction purposes.

Myanmar

India was one of the leading supporters of Burmese independence and established diplomatic relations after Burma’s independence from Great Britain in 1948. For many years, Indo-Burmese relations were strong due to cultural links, flourishing commerce, common interests in regional affairs and the presence of a significant Indian community in Burma. India provided considerable support when Burma struggled with regional insurgencies.

However, the overthrow of the democratic government by the Military of Burma led to strains in ties. Along with much of the world, India condemned the suppression of democracy and Burma ordered the expulsion of the Burmese Indian community, increasing its own isolation from the world. Only China maintained close links with Burma while India supported the pro-democracy movement.

However, due to geo-political concerns, India revived its relations and recognised the new name of Myanmar in 1993 overcoming strains over drug trafficking, the suppression of democracy and the rule of the military junta in Burma. Burma is situated to the south of the states of Mizoram, Manipur, Nagaland and Arunachal Pradesh in Northeast India. and the proximity of the People’s Republic of China gives strategic importance to Indo-Burmese relations.

The Indo-Burmese border stretches over 1,600 miles and some insurgents in North-east India seek refuge in Myanmar. Consequently, India has been keen on increasing military cooperation with Myanmar in its counter-insurgency activities. In 2001, the Indian Army completed the construction of a major road along its border with Myanmar. India has also been building major roads, highways, ports and pipelines within Myanmar in an attempt to increase its strategic influence in the region and also to counter China’s growing strides in the Indochina peninsula. Indian companies have also sought active participation in oil and natural gas exploration in Myanmar.In February 2007, India announced a plan to develop the Sittwe port, which would enable ocean access from Indian Northeastern states like Mizoram, via the Kaladan River.

India is a major customer of Myanmarese oil and gas. In 2007, Indian exports to Myanmar totaled US$185 million, while its imports from Myanmar were valued at around US$810 million, consisting mostly of oil and gas. India has granted US$100 million credit to fund highway infrastructure projects in Myanmar, while US$ 57 million has been offered to upgrade Myanmarese railways.

A further US$27 million in grants has been pledged for road and rail projects. India is one of the few countries that has provided military assistance to the Myanmarese junta. However, there has been increasing pressure on India to cut some of its military supplies to Myanmar. Relations between the two remain close which was evident in the aftermath of Cyclone Nargis, when India was one of the few countries whose relief and rescue aid proposals were accepted by Myanmar’s ruling junta.

Maldives

India enjoys a considerable influence over Maldives’ foreign policy and provides extensive security co-operation especially after the Operation Cactus in 1988 during which India repelled Tamil mercenaries who invaded the country. As founder member in 1985 of the South Asian Association for Regional Cooperation, SAARC, which brings together Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka, the country plays a very active role in SAARC.

The Maldives has taken the lead in calling for a South Asian Free Trade Agreement, the formulation of a Social Charter, the initiation of informal political consultations in SAARC forums, the lobbying for greater action on environmental issues, the proposal of numerous human rights measures such as the regional convention on child rights and for setting up a SAARC Human Rights Resource Centre. The Maldives is also an advocate of greater international profile for SAARC such as through formulating common positions at the UN. But the Maldives claims the Indian-administered territory of Minicoy as part of its country, that is inhabited by Muslims.

India is starting the process to bring the island country into India’s security grid. The move comes after the moderate Islamic nation approached New Delhi earlier this year over fears that one of its island resorts could be taken over by terrorists given its lack of military assets and surveillance capabilities.

India is also signing an agreement later this year which includes following things:

• India will permanently base two helicopters in the country to enhance its surveillance capabilities and ability to respond swiftly to threats. One helicopter from the Coast Guard is likely to be handed over during Antony’s visit while another from the Navy will be cleared for transfer shortly.

• Maldives has coastal radars on only two of its 26 atolls. India will help set up radars on all 26 for seamless coverage of approaching vessels and aircraft.

• The coastal radar chain in Maldives will be networked with the Indian coastal radar system. India has already undertaken a project to install radars along its entire coastline. The radar chains of the two countries will be interlinked and a central control room in India’s Coastal Command will get a seamless radar picture.

• The Indian Coast Guard (ICG) will carry out regular Dornier sorties over the island nation to look out for suspicious movements or vessels. The Southern Naval Command will overlook the inclusion of Maldives into the Indian security grid.

• Military teams from Maldives will visit the tri-services Andaman Nicobar Command (ANC) to observe how India manages security and surveillance of the critical island chain.

Pakistan

Despite historical, cultural and ethnic links between them, relations between India and Pakistan have been plagued by years of mistrust and suspicion ever since the partition of India in 1947. The principal source of contention between India and its western neighbour has been the Kashmir conflict. After an invasion by Pashtun tribesmen and Pakistani paramilitary forces, the Hindu Maharaja of the Dogra Kingdom of Jammu and Kashmir, Hari Singh, and its Muslim Prime Minister, Sheikh Abdullah, signed an Instrument of Accession with New Delhi.

The First Kashmir War started after the Indian Army entered Srinagar, the capital of the state, to secure the area from the invading forces. The war ended in December 1948 with the Line of Control dividing the erstwhile princely state into territories administered by Pakistan (northern and western areas) and India (southern, central and northeastern areas). Pakistan contested the legality of the Instrument of Accession since the Dogra Kingdom has signed a standstill agreement with it.

The Indo-Pakistani War of 1965 started following the failure of Pakistan’s Operation Gibraltar, which was designed to infiltrate forces into Jammu and Kashmir to precipitate an insurgency against rule by India. The five-week war caused thousands of casualties on both sides. It ended in a United Nations (UN) mandated ceasefire and the subsequent issuance of the Tashkent Declaration.

India and Pakistan went to war again in 1971, this time the conflict being over East Pakistan. The large-scale atrocities committed there by the Pakistan army led to millions of Bengali refugees pouring over into India. India, along with the Mukti Bahini, defeated Pakistan and the Pakistani forces surrendered on the eastern front. The war resulted in the creation of Bangladesh.

In 1998, India carried out the Pokhran-II nuclear tests which was followed by Pakistan’s Chagai-I tests. Following the Lahore Declaration in February 1999, relations briefly improved. A few months later however,Pakistani paramilitary forces and Pakistani Army, infiltrated in large numbers into the Kargil district of Indian Kashmir. This initiated the Kargil conflict after India moved in thousands of troops to successfully flush out the infiltrators.

Although the conflict did not result in a full-scale war between India and Pakistan, relations between the two reached all-time low which worsened even further following the involvement of Pakistan-based terrorists in the hijacking of the Indian Airlines IC814 plane in December 1999. Attempts to normalize relations, such as the Agra summit held in July 2001, failed.

An attack on the Indian Parliament in Decem...