Saturday, 29 April 2017

Myanmar: Trade with India rising; much more needs to be done

Myanmar's bilateral engagement with India in trade has gained momentum since 2008 when political and economic reforms were launched in the former 'pariah' state. India-Myanmar trade has more than doubled in the last seven years and has crossed $2 billion in 2013-14,
Analysis
Myanmar’s bilateral engagement with India in trade has gained momentum since 2008 when political and economic reforms were launched in the former ’pariah’ state. India-Myanmar trade has more than doubled in the last seven years and has crossed $2 billion in 2013-14, but much remains to be done, as India is Myanmar’s distant 11th trade partner.
The 5th India-Myanmar Joint Trade Committee meeting held on 17 February in Myanmar’s capital city aimed at intensifying economic cooperation between the two countries. The meeting was co-chaired by Indian Minister of Commerce and Industry, Nirmala Sitharaman, who announced that bilateral trade will reach $10 billion in next five years and Indian investments in Myanmar would cross $2 billion mark.
In order to achieve this trade target, two routes — maritime and border trade — assume significance. Ever since India launched its Look East Policy, Myanmar’s importance as a strategic and economic partner has been important and trade and connectivity projects were initiated with an objective of achieving regional prosperity.
Border trade
Myanmar is India’s land-bridge to South-East Asia. Sharing a 1,700-km border, the immense potential of border trade potential between was rightly identified by the Look East Policy. However, the only operational border trading post has been the Moreh-Tamu post, off the border in Manipur state in India.
Trade between India and Myanmar through the border trade points of Moreh and Zokhawthar in 2012-13 was only $ 6.5 million. However, the informal trade that takes place across the border is several times higher. Large unregulated informal trade, fraught with security, health and safety risks have remained as challenges to border trade.
Myanmar exports 25 percent and imports 15 percent of its total trade through the border from India. Border trade with India comprises of only 1 percent of Myanmar’s total border trade. India accounts for a sizeable share in Myanmar’s imports of pharmaceutical products (37 percent), essential oil, perfumes, and cosmetics (6.6 percent), rubber and articles (6.2 percent), articles of iron or steel (5.6 percent), cotton (5.6 percent), and iron and steel (5.5 percent).
The Indian commerce and industry minister during her visit to Manipur earlier this year had said that her government is keen on trade and plantation projects in the region as part of the Special Economic Zone in the state. Sitharaman in the bilateral meeting in Nay Pyi Taw underlined the need for improving border trade by offering Myanmar, banking arrangements suited for border trade.
Maritime trade
Trade through sea is another way of intensifying economic cooperation between the two countries. Rightly, discussed in the Joint Trade Committee Meeting was India’s assistance for subsidized direct shipping links to Myanmar. Potential of maritime trade with Myanmar cannot be overlooked since South-East Asian economies- Singapore, Indonesia and Malaysia, have become important trade destinations.
The Kaladan Multimodal Transport Project (KMMTP) that connects Kolkata port with Sittwe port presents such an opportunity. Also important would be the Chennai port for sea links with ports of Yangon and Dawei, the latter is being developed by Thai companies into a Special Economic Zone. Hence, it is no coincidence that the next round of Indo-Myanmar Joint Trade Committee Meeting scheduled to take place in Chennai.
Maritime trade, however bypasses the North-Eastern region of India, and development of this region has been an imperative of the Look East Policy, hence skepticism exists for over-reliance on maritime trade to boost economic cooperation between the two countries. Undoubtedly, maritime trade is high in returns and presents lower security risks compared to border trade.
Indian investments
India is 12th on the list of investors in Myanmar with a cumulative investment of US $ 1.89 billion from 1989 to 2012. Foreign direct investment in Myanmar hit US$6 billion in the first 9 months of the current fiscal year 2014-15.
India’s engineering sector is eyeing the Myanmar market to create a bigger presence for engineering exports, and oil and gas companies ONGC Videsh and GAIL are aggressively scouting for more exploratory blocks in Myanmar. Infrastructure development is another area where India is engaging with Myanmar and is expected to continue to do so.
The new Foreign Direct Investment (FDI) law in Myanmar allows 100 percent FDI in textiles, 80 percent in food and beverages and production and distribution of fruits and vegetables. These two sectors in which India can intensify investment, especially for food and beverages production the thinly populated North-East states could be ideal, because of the ready availability of land.
The opportunity that Myanmar presents for Indian companies is immense, but without identifying the sectors for increased engagement, the efforts would be in vain. This must be the logic behind Sitharaman’s invitation to the Union of Myanmar Federation of Chambers of Commerce and Industry to India in April for showcasing Myanmar’s economy to attract Indian investments.
(The writer is a Research Assistant at Observer Research Foundation, Kolkata)
Sri Lanka: TN position and NPC resolution can delay refugees’ return
N Sathiya Moorthy
Independent of the enthusiasm shown by the Governments of India and Sri Lanka for the early return of the over 100,000 Tamil refugees in southern Tamil Nadu to their homeland across the Palk Strait, there could be delays of the unexpected kind. The position taken by the host Tamil Nadu Government and the ’genocide’ resolution passed by the Tamils-exclusive Northern Provincial Council (NPC) recently has the potential to discourage expectant returnees to have a re-think.
Any refugee returnee issue of the kind is fraught with inherent political, social and administrative problems, both fathomable and otherwise. Considering that the Tamil refugees from Sri Lanka have spent a substantial part of their growing-up years in Tamil Nadu, they will have inherent apprehensions in re-locating to a land that they almost/utmost unfamiliar and at times uncomfortable with.
For starters, the refugees will require assurances on rehabilitation, for them to be able to start their off their from where they had left in the host-State, despite all the other inconveniences, even if not from where they had left it before the ’ethnic war’ intervened and destroyed much of what they have had. Given the long and numerous stories of inevitable unemployment and joblessness flowing from across the Strait, they would also be concerned about family incomes, to feed themselves all and for providing education and healthcare for their children and the needy, respectively.
The youth among them, who may have been born and/or married while in the Indian camps, may not know the Sri Lanka of their earlier generation and might even feel like ’outsiders’. Some may be disturbed by a feeling of ’guilt’, and others too apprehensive about possible taunting by their brethren back home. The central theme in this case would that be that they had settled safely in a secure environs far away from the war-zones, leaving the rest to fight and die in the war that was not exclusively theirs. Yet, their incessant yearning to return home cannot be wished away, either.
Even in the best of times, the Sri Lankan State and the Sinhala-Buddhist nationalist polity in the island-nation would have apprehensions about the wholesale return of the Tamil refugees from India in particular, and those from across the world, otherwise. Apart from the 100,000-plus refugees in India, a guesstimated 200,000 of them, mainly those whose applications for asylum may be, or may have been, rejected are said to be spread across the western world.
The mid-year report of the UN High Commissioner for Refugees (UNHCR) for 2014 puts the number of ’people of concern’ from Sri Lanka at 181,645. Official More than a third of this figure comprises refugees in Indian camps, going by domestic Government figures. Incidentally, another 35,000 or so Tamil refugees from Sri Lanka live outside the camp in India, either on their own, or with relatives and friends.
No throwing out
India is not a signatory to the UN refugee convention. Nor does it have a refugee law, on the lines proposed. Yet, to refugees from across all borders abutting the country, India has been doing more than what is internationally expected or prescribed. It’s both acknowledged and appreciated, both by the individuals concerned and the international community.
There is no culture, politics or functional legal framework for India to either throw them all out, or not accept them, or hold them hostage in the mid-seas or land-borders, as has been the case with many countries that are signatories to the UN convention and pride themselves to be having a prescription law for the protection of refugees. Indian and Indians do not know to ask their ’guests’ – however intrusive and destructive – to get out. Nor do they know the why and how of throwing them out.
Even without refugees, Indian immigration laws are lax in formulation and lazy in enforcement. Of course, unlike many other countries, particularly in the western hemisphere, India does not make politics out of granting ’political-asylum’ to every other person demanding it at one stage, and denying them the same when it may have become uncomfortable nearer home. It’s choosy and conservative in granting ’political asylum’, if at all. The last big name to be granted political asylum in India was the Dalai Lama. That was decades ago.
It’s thus that local political groups have often suggested/demanded that willing refugees be granted Indian citizenship without second thoughts – though the politics and processes of it may be more complex than elsewhere, too. In the case of Sri Lanka’s Tamil refugees, the DMK party in Tamil Nadu had suggested the same, but the response of the refugees themselves was muted, if not discouraging.
Help & concerns
Despite ignorance and impressions to the contrary, Sri Lankan Government agencies, particularly those in south India, have been doing a commendable job, to make things as comfortable as possible for the refugees. However, their efforts have often been stymied by pan-Tamil protestors in the State, who manhandled Sri Lankan officials, operating out of Tamil Nadu Government offices in the district headquarters, with police protection.
A few years ago, the Sri Lankan Deputy High Commission (DHC) in Chennai commenced a process of registering births and deaths in the camps, at respective district headquarters on a cyclic basis, to facilitate the new-born to attain Sri Lankan citizenship, passport and other identification papers as applicable in alien environs. Even without this, the DHC at Chennai often wears a festive look as Sri Lankan refugees from within the country and outside – so also Diaspora members – celebrate their marriages, and/or have them registered there.
In coordination with OfERR, a Sri Lankan refugee-relief organisation and the cooperation of the Tamil Nadu Government, the DHC also conducted O-Level exams for camp-inmates at Chennai a few years ago. Teachers from Sri Lanka were available to coach the candidates, though only for a few weeks, and question papers and invigilators too were flown in from Sri Lanka for the purpose. However, this experiment too could not be repeated/replicated in the following years, to include possible A-Level exams, too.
After mindless attacks by local pan-Tamil groups, the ’mobile registration’ process – of DHC officials visiting district headquarters by turn – had to be given up. The SL officials had chosen weekends for the registration purpose to minimise hardship and loss of sundry earning for the refugees during the working week. Lately, there has also been some reluctance to help revive the ’mobile registration’ process – or, so it seems.
Otherwise, the Sri Lankan Government too would have to do enough by way of providing facilities for the returnees to settle down, mainly in the place of their original residence. It’s unclear how many of the refugees owned the residences that they had left or otherwise had a lien over the same – and how many of these homesteads might have changed hands, be it in the possession of the armed forces or fellow-Tamil encroachers.
Govt apparatus still cautious
The present political-change in Sri Lanka may be more conducive for the refugees to consider returning in large numbers, if only over a period. Yet, independent of the change and consequent perceptions, the Government Establishment in Sri Lanka, particularly the security apparatus, could be apprehensive about the LTTE-linked militant loyalties of at least some of them, and the consequent potential for trouble. These are for real, until the last embers of a dying separatist Tamil cause are doused wholly. It’s thus for the refugee population to reassure them that they meant no harm, now or later.
The ’Sinhala-Buddhist nationalist’ polity might be worried at the surge in the Tamil voter-number and population. Independent of the results that some of them have enthusiastically celebrated, the contribution of the Tamil-speaking population to present-day President Maithripala Sirisena’s victory would be an eternal cause for their unfounded worries for decades more to come. It’s another matter that the refugees, from nearer to home in India, and elsewhere, have the possible potential to tilt the political status quo within the community.
Post-poll in Sri Lanka, the national leaderships in the two countries have enthusiastically welcomed suggestions for the early return of willing refugees, housed in India. At the highest-level talks in Delhi, between President Sirisena and Prime Minister Narendra Modi, the two sides have decided to take forward the efforts in this direction.
It does not require any reiteration that there would not be any coercive element in this regard. Nor would there be any indirect encouragement for them to return early, say, in the form of the Indian government holding back their monthly doles, rations and other facilities. At the same time, the Government of India can be expected to help and assist the returnees in every which way, if they volunteer – and only volunteer – to go back to their homeland.
Apart from the itemised list of funding and assistance that India would be extending, there have also been suggestions for the Indian Government to continue with the payment of doles, receivable in bank accounts in Sri Lanka, for a fixed period, say up to three years. Another suggestion has been for India to extend and expand the IDP housing scheme in the war-affected areas of Sri Lanka, to cover the refugees, particularly those now camping in Tamil Nadu and Puducherry.
The Government of India and that in Tamil Nadu could also be expected to continue with their educational concessions, and seat reservation for refugee families, in their higher educational institutions, wherever applicable, for a specific length of time. There are other specifics that the Governments in India may be willing to consider as and when presented appropriately.
Fear, intimidation and autonomy
However, there are palpable hurdles, many of them political, for the enthusiastic return of the refugees to their homeland. Taking a patronising view of things, the host Tamil Nadu Government jumped the gun even before the green flag had been pulled out for the refugees’ return, to declare that it would want the Sri Lankan armed forces withdrawn from the Tamil areas, before it could happen. While de-militarisation has been among the Tamils’ demands in the larger context neither the refugees, nor brethren back home, have made it a condition precedent for the former returning home.
The State Government has since gone beyond what Chief Minister Panneerselvam had conveyed to Prime Minister Modi in a letter last month. It was soon followed by the State’s decision not to participate in the multi-ministerial officials’ meeting called to discuss the issue in Delhi. In his policy-making annual address to the State Assembly, Governor K Rosaiah has since said that any meeting to discuss voluntary repatriation the refugees was premature and should be deferred in view of the prevailing atmosphere of fear and intimidation, among other things.
The State Government was committed to the peaceful, just and honourable resettlement of the refugees, the Governor said. Flagging specific concerns in relation to the government of a ’friendly neighbour’, the Governor spoke of the ’presence of the Army in Tamil areas, non-settlement of internally-displaced people and absence of any concrete and credible measures taken by the Sri Lankan Government’, as among the other issues in this regard.
"But it is of the view that voluntary repatriation can be countenanced only after proper rehabilitation of the internally- displaced Sri Lankan Tamils," Governor Rosaiah said. In this context, he stressed that a congenial atmosphere for the return of the refugees could be achieved only by fully restoring the autonomy and democratic rights of Tamil minorities, besides sufficient economic and political measures – again a sensitive political and constitutional issue in that country.
Portending trouble?
In and from the post-poll Sri Lanka under new regime with Tamil support, the Northern Provincial Council (NPC) resolution, alleging ’genocide’ in the end-game of the conclusive ’Eelam War IV" and the consequent demand for continuing with an international probe into ’accountability issues’ against the Sri Lankan armed forces, may have already come as a greater, emotional hurdle to refugee-return. It’s not about what has been said, or not said, but about what it might portend, even in passive socio-political terms, to life in the Tamil areas of Sri Lanka, particularly the Northern Province.
Northern Province Chief Minister and former Supreme Court Judge, C V Wigneswaran, may have conferred greater respectability and urgency to the issues that the resolution has flagged by his attesting to its content and piloting it in the Provincial Council. Wigneswaran may have also further ruffled the refugees’ hopes by declaring even more recently that there are over a hundred thousand war widows among the Tamils in the North. The acknowledged official figure for the Tamil war-widows earlier was 90,000, in the North and the East put together.
With the international community, starting with the US sponsor of the UNHRC resolution ordering an ’independent probe’ in March last year, and the UNHRC too agreeing to delaying the presentation of the investigation report, at the instance of the new Government in Sri Lanka, the reaction of the Tamil community in general, and that of the NPC on the one hand and the hard-line sections of the Sri Lankan Tamil Diaspora, are anxiously awaited by refugees who want to return home from India. Any rumbling on the ground would discourage the refugees in India in particular, and elsewhere, otherwise, from wanting to return home early.
Economic refugees
There is a non-Indian element to the whole ’refugee-return’ exercise. Considering that even five years after the end of the ethnic war in Sri Lanka, Tamils in the country keep taking dangerous boat-rides to nations such as Australia in search of greener pastures but blaming it on unsubstantiated military harassment, there is resistance to refugee-return from among the Tamils, including those with local citizenship, across the West.
There have even been claims/accusations against the West, though not always openly stated and substantiated, that some nations had taken a keener interest in ’accountability issues’ in Sri Lanka, only to try and create the ’right conditions’ for the early return of asylum-seekers and refugees in their midst. There have even been charges that those nations were manipulated on issues that were otherwise real, only to try and ensure that the refugees/asylum-seekers would not be sent back to Sri Lanka.
It is often argued that the continuing western interest in seeing the refugees in the Indian camps return home early also owed to their own concern about the return of those ’illegally’ staying back in their countries. The ’Indian example’ and precedent could then be used for them to ’encourage’ illegal migrants among them to return to Sri Lanka, early on – or, so goes the argument.
(The writer is a Senior Fellow at Observer Research Foundation, Chennai Chapter)
Country Reports
Afghanistan
Pak army, ISI chiefs in Kabul
The Chief of Army Staff of Pakistan, Gen Raheel Sharif and the Director-General of the ISI Rizwan Akhtar were in Kabul this week for a one-day visit to discuss security issues between the two countries. During the meeting, Gen Sharif claimed that the insurgents carrying out attacks were enemies of both Afghanistan and Pakistan. Both sides vowed to explore possibilities of conducting joint operations to tackle the insurgents.
For more information see: "Pakistan’s Army and ISI Chiefs Arrive to Kabul", Tolo News, 17 February 2015; "Afghanistan’s enemy is Pakistan’s enemy, says army chief", Dawn, 17 February 2015
Peace talks to be revived
According to reports emerging from Afghanistan, President Ashraf Ghani is taking preliminary steps to begin peace talks with the Taliban again. President Ghani has begun meeting various stakeholders to ensure that all voices are taken into account if negotiations move forward. Senior Pakistani officials have claimed that Taliban officials, including Mullah Omar have been approached about the possibility of reopening such talks. Pakistani officials have also confirmed that the Taliban’s office in Doha has been revived and that initial contact between the Afghan government and the Taliban has already taken place.
Civilian casualties up
The 2014 report of the UN Assistance Mission in Afghanistan (UNAMA) on "Protection of Civilians in Armed Conflict" has estimated a 22 percent increase in civilian casualties in 2014. The annual report puts the total number of dead and injured civilians at 10,548, which has been the highest figure recorded by the UN since 2009.
For more information see : "UNAMA report shows 22 percent rise in civilian casualties in Afghanistan", Khaama Press, 18 February 2015
Bangladesh
Politics in conundrum
There seems to be no end to the political chaos in Bangladesh. The entire week country wide witnessed country wide shutdown enforced by opposition Bangladesh Nationalist party (BNP). Since 5th of January BNP has been staging country-wide shutdown to oust Shiekh Hasina led Awami League government. Also, political violence continued and there had been to improvement of the law and order situation. International community has expressed concern over the prevailing political condition of the country.
UN Secretary-General Ban Ki-moon has written to BNP leader Begum Khaleda Zia, expressing concern over the situation in the country. Meanwhile, a group from European Union visited Bangladesh to assess the situation. The EU delegation met leaders of both the political parties. But efforts of the international community do not seem to alter the condition. BNP has welcomed the EU’s call for a dialogue but Prime Minister Sheikh Haisna has categorically said that no dialogue will be possible unless there is end to violence.Bangladesh is witnessing continuous country wide Around 71 people died in the political violence since shutdown began in January.
For more information see : "One killed in violence", The Independent, 16 February 2015; "UN chief writes to Hasina, Khaleda", The Independent, 18 February 2015, "48-hour Hartal, Again", The Daily Star, 18 February 2015; "12 sustain burns", The Independent, 20 February 2015; "Dialogue amid violence not a good idea, AL tells EP team", The Independent, 20 February 2015
$8.69-b projects with China
China has responded positively to Bangladesh’s request for financial cooperation in important projects. The Chinese embassy recently informed the Prime Minister’s Office (PMO) that the list of 15 development projects submitted to Beijing, involving over US$8.69 billion, for inclusion in China’s 13th five-year plan (2016-2020), would be considered positively. "
For more information see : "China sends positive feedback for $8.69 billion projects", The Independent, 17 February 2015
Security talks with India
The Home Secretaries of India and Bangladesh met this week in Delhi. At the meeting the two sides reviewed a wide range of security issues including terrorism, insurgency, smuggling, and trafficking. Bangladesh has expressed its concern at a recent "rise" in the number of killings of Bangladeshi nationals by the Indian Border Security Force (BSF).
The major outcome of the meeting was consensus among the two countries to strengthen the border management system through "enhanced joint patrol and regular meetings at local levels". Bangladesh side was led by Senior Secretary for home affairs Md Mozammel Haque Khane, while Union Home Secretary LC Goyal led the Indian team.
For more information see : "Dhaka expresses concern over ’rising’ border killing", Bdnews24.com, 18 January 2015
Bhutan
India’s ’smiling squads’ on border
India’s border guard force Sashastra Seema Bal (SSB) has replaced its gun-toting troops with a ’smiling’ non-combative personnel team to interact and frisk people who cross-over to India from Indian borders of Nepal and Bhutan.
For more information see : "SSB deploys unarmed ’smiling’ squads at Nepal, Bhutan borders", www.zeenews.india.com, 18 February 2015
Drop in crime rate
The Royal Bhutan Police has said that there has been a drop in the nationwide crime rate by about 15 percent compared to last year. The RBP said that compared to 2013 when 3288 crime cases were recorded, 2014 saw 2775 cases.

South Asia Weekly | Volume IX; Issue 10

The Bichanakandi river in Bangladesh
Bhutan: Hydropower cooperation under BBIN
Mihir Bhonsale
Energy cooperation among countries in the Bangladesh-Bhutan-India-Nepal (BBIN) group presents opportunities for hydropower rich Bhutan to diversify its hydropower exports and thereby finance social projects and attain economic self-sufficiency.
An inter-governmental Joint Working Group (JWG) of BBIN countries met for the third time on 19 and 20 January to discuss ways to carry forward the cooperation. The JWG is said to have taken forward the discussions initiated in the second meeting last year and specific projects identified under the BBIN framework were discussed.
Bangladesh keen
Bangladesh is keen on importing power from the tiny Himalayan nation. Bhutan and Bangladesh are working on a Memorandum of Understanding (MoU) identifying projects for hydropower development and electricity import via India. Economic Affairs minister Norbu Wangchuck visited Bheramara power station in Kusthia district of Bangladesh.
Bangladesh is all set to invest around US$ 1 billion in Bhutan for tapping hydropower resources in Bhutan and importing electricity via India. The International Finance Corporation of the World Bank has assured to finance sub-regional power trade between the BBIN countries. The country now imports 600 MW electricity from India with the recent addition of 100 MW generated in the North-East Indian state of Tripura. Earlier in October 2013, a link was established between Behrampore and Behramara for exporting 500 MW.
Bhutan generated 386.74 GWh of energy in April 2015, the highest energy generated since the commissioning of the 1,020 MW Tala Hydroelectric project in 2007. It earned Nu 621.96 million in 2015 from export of electricity to India. Economic affairs minister Norbu Wangchuk has said that the SAARC Energy Cooperation framework, which has recently been ratified in the parliament, has provided an impetus for power trading with other SAARC countries.
Beyond hydropower development and export cooperation beyond the 10,000 MW it is now developing with India, Bhutan can think of developing hydropower projects with Bangladesh and boost its international currency reserves as Bangladesh is set pay for hydropower imports in U.S. dollars.
Developing capacities
Crucial to any fruitful energy cooperation is the need for infrastructure development, capacity building and planning for optimal utilisation of the electricity potential of regional electricity generation resources, enhanced grid security and to even out diversity in peak demand and seasonal variation.
Delays in completion of projects leading to escalation of construction costs and red tape have been some of the reasons arresting hydropower development in Bhutan. The country is far from realising the 10,000 MW target it is set to develop with India’s help.
Bhutan would harness only about 5,000MW of electricity by 2021, half the target the country had earlier pursued to achieve by 2020. The total installed capacity of hydropower today is about 1,600MW. The completion of Punatshangchu I & II and Mandgdechu hydropower projects is expected to add about another 3000 MW by 2021.
At present, India imports 1,542 MW of power from Bhutan of the 4 power projects commissioned so far. Some 10 projects are under construction, but are expected to be delayed. Meanwhile, Bhutan is considering the project 1125 Kuri-1 through a trilateral cooperation with India and Bangladesh.
Game-changer
Bangladesh Foreign Minister, Abul Hassan Mahmood Ali described the BBIN Sub-regional cooperation as a “game changer” at the Raisina Dialogue in New Delhi held on 1-3 March.
The BBIN countries are busy working out, bilateral or trilateral agreements under the already signed Motor Vehicles Agreement in June 2015. Through the JWG meetings experts are busy discussing projects to be completed for road and rail connectivity projects.
The SAARC Framework Agreement for Energy Cooperation (Electricity) signed in 2014 paved the way for cross border electricity exchanges and trade. It rightly identified the importance of electricity in socio-economic development of the region. For some countries electricity is a major revenue for others it will be an avenue for meeting the growing energy needs.
(The writer is a Research Assistant at Observer Research Foundation, Kolkata).    

India: A Game-changer Budget by Modi Govt?
Satish Misra
The BJP-led National Democratic Alliance (NDA) government of Prime Minister Narendra Modi presented its third budget on the last day of February. Union Finance Minister Arun Jaitley, while presenting it in the House of the People, namely, the Lok Sabha, said the budget was being presented when the global economy is in serious crisis and the global growth has slowed down from 3.4 percent in 2014 to 3.1 percent in 2015. Financial markets have been battered and global trade has contracted, but amidst “all these global headwinds, the Indian economy has held its ground firmly”, he said.
The budget will be extensively debated in the two houses of parliament before it is approved. The main thrust and focus of the 2016-2017 budgetary exercise seems to be aimed at boosting the rural economy because rural sector particularly the farming activity has come under considerable stress.
Rural distress
Roughly 58 per cent of the rural households engage in agriculture and of this, two-thirds are heavily dependent on it. Rural economy in last few years had been on the downward slope as it was marked by slowing wages, poor incomes and lower profits from farming. Poor monsoons for two years in succession had worsened the situation further.
The government, through this budget, has sought to correct the rural distress by putting villages at the centre of its developmental agenda. The Finance Minister has allocated funds to the tune of Rs 87,765 crores to the rural sector which will be used for creating rural infrastructure such as creation of a dedicated long term ‘Irrigation’ fund with an initial corpus of Rs 20,000 crore.  The budget has an outlay of Rs 19,000 crores which will be spent in this financial year on rural roads as part of the government’s goal to ensure that all habitations are connected by 2019.
The Finance Minister has also given a push to the rural electrification in the next two years. Goals for rural connectivity and making of electricity available, if fulfilled, have the potential of transforming the rural economy and the government has done well to focus on it.
Healthy step
Introduction of a health insurance scheme that proposes a coverage up to Rs one lakh against hospitalisation costs for economically weaker households with senior citizens above the age of 60 eligible for another Rs 30,000 in top-up cover, though inadequate for contemporary critical in-hospital care yet, is a significant step forward.
Yet another commendable initiative in the budget is to provide all families below the poverty line with cooking gas. This would not only ensure better health for the underprivileged women but would also go a long way for saving the wood for better environment tomorrow.
The budget, seen from a larger microeconomic angle, has promised to keep the fiscal deficit under committed limits. At the same time, the Finance Minister has stressed the need for more elasticity in dealing with unfavourable economic situations.
The Finance Minister has proposed the setting up of a committee to have a relook at the entire roadmap mandated by the Fiscal Responsibility and Budget Management Act of 2003 to explore the possibility of having a target range instead of fixed numbers which may provide the government much needed elbow room to align fiscal expansion or contraction with credit-availability.
This budget does not offer much to the salaried class barring some sops to lower and middle income families.  The salaried class has also been shocked with the proposal to tax 60 percent of the Employees Provident Fund. The government has dropped enough hints of taking back the proposal of taxing the EPF.
Shifting emphasis
While the first two budgets of the Modi government were in a way aimed at pleasing the middle classes which had been instrumental in creating a positive environment for the ruling party to win a huge victory in the 2014 general elections, this budget exercise seems to be a determined attempt to shift the emphasis towards reviving the rural economy and in the process to correct its negative “Suit-Boot ki Sarkar” image which had been projected by the opposition particularly the Congress.
The Modi government, by its third budget, has given a clear signal that it is ready to traverse the path which was taken by its predecessor UPA government of former Prime Minister Manmohan Singh.  Substantial hiking of the MGNREGS budget to the level of Rs 38,500 crore is concrete evidence that the Modi government has come to accept the utility of the UPA scheme.
Details of the budget must have deeply disappointed those who had sincerely hoped that Narendra Modi would prove to a transformative leader like former US President Ronald Regan or former British Prime Minister Margret Thatcher or former Singapore Prime Minister Lee Kuan Yew.
The budget has sought to send political signals that the Modi Government cares for the poor, marginalised and deprived sections of society but whether it will get the BJP votes in coming assembly elections in four states and one Union Territory is difficult to fathom. Only electoral results will either confirm or negate the government’s strategy of course correction.
The budget is positive on intents and tall on promises. But it seems to be short rather very short on execution or implementation. The budget document does not give a roadmap as how the government proposes to convert policy measures into measureable realties on ground barring the Finance Minister’s proposal of several bills including the much delayed GST bill.
Successful passage of more than half a dozen important bills which have the potential of facilitating the execution of the well-meaning policies requires cooperation of the opposition parties including of the Congress but there are no indications from the ruling party that it is serious in creative suitable environment for taking the opposition on board for ensuring the safe passage of the bills through the two houses of parliament. Little over 21 months old Modi government appears to be in a confrontationist mode rather being in a cooperative mood.
(Dr Satish Misra is a Senior Fellow at Observer Research Foundation, Delhi)
Country Reports

Afghanistan
Blast near Indian consulate
On 2 March, a car bomb detonated near the Indian consulate in the Afghan city of Jalalabad, capital of Nangarhar province. Afghan security forces killed five militants – after the suicide bomber was killed due to hisown strike. Two people were killed and 19 wounded as a result of the attacks. The two victims, according to Reuters, were a police officer and a civilian woman. Consular officials told the BBC that none of their staff were hurt. A spokesman for the governor of Nangarhar province, Attahullah Khugyani, said, “Their target was the Indian consulate, but our forces shot and killed them all before they reached their target.” The Islamic State, active in Nangarhar, reportedly claimed responsibility for the attack.
For more information, see: Militants attack Indian consulate in Jalalabad”, The Times of India, 2 March 2016
Suicide-bombs kill 20

South Asia Weekly Report | Volume IX; Issue 22

Wreckage of the destroyed vehicle, in which Mullah Akhtar Mansour was allegedly travelling in the Ahmed Wal area in Balochistan
Photo courtesy: Abdul Malik/AP

ANALYSES

Pakistan: Life after Mullah Mansour

By Kriti M. Shah
The recent killing of Afghan Taliban leader Mullah Mansour by a United States’ drone in Pakistan has caused a major upheaval in the relationship between the two nations. The attack, which took place in Balochistan without prior permission from the Pakistani government, has caused a familiar sense of outrage in the Pakistani establishment, reminiscent of the 2011 raid in Abottabad that killed Osama bin-Laden. The killing of Mansour is significant, as it not only deals a major blow to the Taliban insurgency, but also validates Afghan and US claims that the Taliban moves around freely in Pakistan, plotting and planning attacks against Afghanistan.
The US raid has set in motion a series of stern statements from the Pakistan civilian and military establishment, calling the attack a violation of the nation’s sovereignty and international law. Pakistan Interior Minister Chaudhary Nisar Ali Khan said that the strike would have “serious implications” for US-Pakistan relations. As he added, if every country targeted perceived threats abroad, “there will be the law of the jungle in the world”. The US is however, making no apologies with President Barack Obama calling the attack an important “milestone” in the US’ efforts to bring peace and stability to Afghanistan and has once again called upon Pakistan to deny terrorists a safe haven.

Impact of killing

The killing of Mansour less than a year after he officially became the leader of the Afghan Taliban poses a major setback for the insurgency movement. It is a hopeful possibility that the new Taliban leader Mullah Haibattullah Akhunzada and other commanders will now feel more threatened and vulnerable, given the US’ determination in rooting them out with complete disregard for Pakistan’s territorial integrity. While in the short run, the killing may provoke a series of attacks and killing in Afghanistan; the hope is that now leaders of the group would be more amenable to peacemaking.
The fact that Mansour was travelling in Pakistan a few miles from the Afghan-Pakistan border also ends Pakistan’s game of plausible deniability regarding the whereabouts of the Taliban. The presence of Mansour within Balochistan is a major vindication for the Afghan government that have long claimed that the Taliban use Pakistan as a safe haven, often travelling freely within the country. Pakistan civilian and military leaders can no longer claim that the Taliban is not in Pakistan and will be further pressurised to act against their freedom.

Pakistan’s double-speak

However, embarrassed by the attack and failure of intelligence in learning about the US operation, Pakistan seems unable to learn from its mistakes. Over a week after the attack, the government has not answered questions related to the attack or provided any plausible explanation as to why Mullah Mansour was travelling in the country under a fake name with a Pakistani passport.
The government seems more interested in probing the role that Iran had in sheltering Mansour, given that the passport allegedly recovered from the scene of the drone strike, had an Iranian visa. Their lack of gratitude toward the US for taking out a known terrorist is not surprising given that the government made similar statements regarding infringement of their sovereignty and territorial integrity after the Bin Laden raid. In both cases, the government failed to provide a reason for why known fugitives and wanted-terrorists were living freely within their borders.
The only difference between the two attacks (on Mansour and Bin Laden) is the change in narrative that the government and military has attempted to propagate since 2011. While the military has undertaken operations in the northwest tribal areas of the countries, tackling terror and extremists groups threatening Pakistan, they have turned a blind eye towards those destabilising Afghanistan.
The Afghan Taliban and the Haqqani Network have been allowed to function freely within Pakistan. The Pakistani military has repeatedly stated their intention that they are doing everything they can to purge terror groups from their borders. Mansour’s killing in Balochistan is in sharp contradiction to the military’s story and embarrasses Pakistan greatly.
While Sartag Aziz, advisor to the Prime Minister on foreign affairs, has stated that Pakistan is committed to continuing efforts of reconciliation within the framework of the Quadrilateral Coordination Group, the time for peace is long gone. The attack is the beginning of a new message directed at both the Taliban and Pakistan that the United States will no longer tolerate the strategic challenge posed by the Taliban leadership by virtue of being in Pakistan.
While the US-Pakistan relationship is prone to ebbs and flows, the strike against Mansour signals that the US has given up on peace talks and, like the Afghan government, is willing to militarily deal with the Taliban. The blocking of the F-16 fighter jets to Pakistan unless it cracks down on the Haqqani Network is an example of the growing frustration of the US with Pakistan’s dilly dallying.
The thinning patience of the Afghan government and the United States with Pakistan is unlikely to change in the short term. While Ashraf Ghani has shifted from his friendly diplomatically outreach to Pakistan, the US seems to be taking the cue that is enough is enough. While Mansour’s death will not pave the way for reconciliation in Afghanistan, the US and Afghanistan must remain committed in its fight against the Taliban.
The Taliban’s rejection of peace talks and increasing closeness with al Qaeda and the Haqqani Network means the insurgency group is unwilling to give up the fight. The fact that the US is willing to cause a setback in its relationship with Pakistan, who it considers an ally, is demonstrative of the US commitment to Afghan stability. Pakistan, on the other hand must buckle down for a long summer of Taliban offensives, realize that reconciliation at this stage is impossible and begin to chart a new dimension of military engagement against the Taliban and the Haqqani Network. If it fails to do, it knows what will happen.
The writer is a Research Assistant at Observer Research Foundation, New Delhi.

Birgunj, the gateway to Nepal

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By Anasua Basu Ray Chaudhury
Birgunj, the second largest city after political capital Kathmandu, is the Nepal’s commercial capital and the main transit point for the country’s international trade. Around 60% of Nepal’s foreign trade passes through Birgunj, located in South Central part of the country in the Terai plains about 89 km South of the capital Kathmandu.
The other side of the border with India is Raxaul, a border town of east Champaran, Bihar, the most active entry point to Nepal from Patna and Kolkata. After four consecutive months of turbulence at the border till the first week of February due to protests by the Madhesis and unofficial blockade by ‘the southern neighbour’, Birgunj customs office has exceeded its monthly revenue target for the first time in six months signifying improvement in trade through the Birgunj-Raxaul border point.